Medvedev Lashes Out at EU Energy Reform

NEW YORK -- Gazprom deputy CEO Alexander Medvedev said Friday that a pending European anti-monopoly plan to split up energy conglomerates smacked of "communism."

Medvedev, who also heads Gazprom's export division, compared the European Union's anti-monopoly plan to "selling cars without wheels."

The EU proposals, which are due to be unveiled Jan. 10, would not extend to Russia's energy sector and could present potential acquisition targets for Gazprom if implemented.

But Medvedev suggested that by chipping away at energy conglomerates that controlled both production and infrastructure, the EU could destabilize companies' investment plans and, in doing so, undermine its energy security.

"In Europe the ghost of communism is back with all the attempts to take ownership of infrastructure and divide it," Medvedev told reporters in a conference call. "I hope at least the United States will not go this way."

Brussels has long pushed Russia to ratify an energy pact that would give independent producers access to its export pipelines and oil and gas fields, thus reducing Gazprom's ability to charge monopolist rents. Russia has resisted, arguing that it would need to receive equivalent strategic assets in Europe in exchange for any deal.

Medvedev added: "It's like asking car producers to sell cars without wheels and engines. ... In my opinion, people without access or ownership of infrastructure on a long-term basis should not be allowed to play a role in the market."

Potentially more harmful, the EU proposals could target Russia's long-term gas supply contracts with European companies, something Gazprom has argued would weaken its ability to invest in new projects.

Separately, Medvedev insisted that Gazprom was capable of meeting the growing appetites of Europe and Asia without detriment to either market.

"I can assure you that we have enough reserves to meet both local demand and export obligations, including potential sales in new markets: in China, Korea, and the U.S. and Canada for [liquefied natural gas] sales. This is fully supported by investment programs," he said.

In particular, Medvedev said the company planned to invest some $40 billion over 25 years to develop the Bovanenkovo field in the arctic Yamal-Nenets autonomous district. Gazprom would start pumping at the field in 2011, with production due to hit a peak rate of 150 billion cubic meters per year in 2015-2016, he said.

"This is quite sufficient not only to compensate for the decline in our current fields, [but] to meet growing demand in Russia and export markets," said Medvedev, who met with officials on a trip to the United States last week to improve ties with Washington.