Putin warns EU on Gazprom probe

Prime Minister Vladimir Putin warned EU nations yesterday that Russia would be carefully monitoring an unprecedented anti-trust probe launched against its powerful natural gas monopoly Gazprom. The cautionary comments marked Putin's first response to a high-stakes dispute that threatens to dominate Russian-EU relations on his expected return to the Kremlin in March next year. Gazprom had previously confirmed the offices of its trading partners and subsidiaries being searched — and documents seized — in the EU's most forceful response to a growing European outcry over alleged price collusion. But Russia's richest and most strategic company said little else about the raids in an apparent attempt to play down the impact of a probe that could alter how Europe pays for nearly a third of its natural gas. That relative silence was broken yesterday when Putin received Gazprom chief Alexei Miller for a rundown on his efforts to boost European exports and expand sales beyond its traditional markets. "The Russian government will be carefully monitoring what is happening around Gazprom. I ask you to report on this in a timely manner," a stern-faced Putin told Miller in nationally-televised remarks. The former KGB colonel then demanded to know whether EU nations had arrested any Gazprom or other officials as part of their raids. "No, Vladimir Vladimirovich, they have not arrested anyone yet," Miller replied in comments that lead Russian state TV news. "Thank God," Putin replied in an apparent effort to underscore the importance he personally attached to the case. The EU probe culminated weeks of grumblings from Russia's top clients and put Gazprom — its growth stalling, and competition from North Africa and other suppliers gathering pace — under the sort of pressure it has not seen in years. The EU's executive commission also warned reluctant member states to proceed as required with liberalising their markets, the painstaking task of forcing firms with control of both pipelines and production to break up their holdings. That campaign has coincided with renewed war of words between Russia and Ukraine and a weekend decision by Gazprom's second-biggest client, Turkey, not to renew an expiring contract it has held since 1986. The European raids came after German and other EU firms threatened to seek arbitration aimed at reducing the price set in long-term Russian contracts that are now more expensive than the spot price of gas. Miller said nothing of the pending court cases but called the searches "completely unexpected". "They came as an unpleasant surprise," Miller said. Putin has attached his name closely to Russia's bid to cement its dominance of the European gas market and thwart alternatives such as the Nabucco pipeline being promoted by the US.