Sunday, July 08, 2007

Russia's plans for the UK

The Sunday Times's Dominic O'Connell takes a look at the recent doings of Alexander Medvedev, deputy chief executive of Gazprom, and notes that
...his plans for Britain go beyond gas. He wants to become a one-stop energy shop for commercial users, selling electricity, heating and even carbon credits.

Supplying electricity also means generating it. “We are looking at acquiring generation assets [power stations]. It will allow us to mitigate different kinds of risk, and to deliver this complete service to our clients. We are in discussion with different potential partners,” he said.

Gazprom’s immense size has provoked nervousness, not only among City watchdogs, but also among politicians, who are uneasy at the close relationship between the company and the Russian government. Gazprom’s chairman, Dmitri Medvedev – no relation to Alexander – is Russia’s first deputy prime minister, and other government representatives sit on its board. The state holds a stake of just over 50%.

European politicians’ worries were exacerbated last year when the company cut off gas supplies to Ukraine after a row over prices. The move was seen as a warning shot by the Kremlin to the country not to stray too far from its connections with Moscow. Supplies to western Europe were disrupted, provoking unrest in Germany which relies on Russia for 40% of its gas.

In March the foreign affairs parliamentary select committee began an inquiry into Britain’s relationship with Russia, with energy security at the top of its agenda. Tony Blair warned that Russian government intervention in western oil and gas projects threatened international investment in the country.
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