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. Last Updated: 07/27/2016

Britain Demands Reciprocity

LONDON -- Britain is open to investment from Russian companies but the investments must not be used for political purposes, and Russia should also allow reciprocal investments, the British Trade and Industry minister said Monday.

Alistair Darling warned that if Russia did not adopt a balanced stance, relations on energy matters between Russia and the EU -- already strained -- could worsen.

"Investors have got to play by the rules. ... We cannot have a situation where companies are being used to extract political capital or leverage," Darling told a conference in London.

State-controlled gas giant Gazprom wants to purchase pipelines and gas distribution companies across Europe and has hinted at a possible takeover of Britain's largest gas retailer, Centrica.

Analysts fear the Kremlin could seek to use such investments to bully countries that oppose its policies.

Russia has told European nations that if its investments are blocked it could divert energy supplies to Asia. Already analysts believe Lithuania's refusal to sell a refinery to a Russian company is behind the closure of an oil pipeline, which Moscow blames on technical problems.

Darling said that if Russian companies wanted to buy British gas distribution assets, British companies should be able to invest upstream in Russian gas fields, something the Kremlin has made harder in recent years.

"If we don't proceed on that basis, things will be increasingly difficult," Darling said.

Darling also called for a more unified European approach on working with Russia to secure energy supplies.

Earlier at the same conference, professor Dieter Helm of Oxford University said bilateral energy deals between countries, including Germany, and Russia reduced Europe's clout and enabled Russia to secure the best economic and political terms.

"Europe needs a common front to Gazprom," Helm said.