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. Last Updated: 07/27/2016

Kasyanov Counters Putin Over Gazprom Reform

Prime Minister Mikhail Kasyanov said Friday that the government would decide on restructuring Gazprom in the next few months, an apparent turnaround on comments made the day before by President Vladimir Putin that seemed likely to slam the brakes on any prospect of reform.

The restructuring of Gazprom "doesn't depend on elections," Interfax reported Kasyanov as saying.

Kasyanov said the government would first have to grapple with setting domestic pipeline tariffs and with finding a way to allow independent producers access to pipelines before any sweeping reform could be conducted on Gazprom itself. "If we say that Gazprom is a monopoly, there's nothing wrong with that," he said. "If that monopoly is efficiently regulated by the state, then it's in order."

"We intend to keep state control over the gas pipeline system and over Gazprom in the future," Putin told reporters Thursday, during talks with German Chancellor Gerhard Schr?der in Yekaterinburg. "We're not going to break up Gazprom," Vedomosti reported him as saying.

Analysts said what appeared to be conflicting signals were a clear sign of a continuing deep divide in the Kremlin and in the government between free market advocates and those in favor of a more statist approach on ways to conduct a much-needed restructuring of the gas behemoth.

"Kasyanov tried to correct the president. [Putin's] statements were seen negatively for the investment climate as a flat-out refusal to reform Gazprom," said Valery Nesterov, energy analyst at Troika Dialog. "But Kasyanov's in a difficult situation. He also tried to step back and call for the creation of a market around Gazprom before touching the company itself by creating a role for independent producers and giving them access to pipelines.

"A fight is inevitable now on how much the state should cut back its functions while not losing control," he said.