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It’s high time the EU stops avoiding a long-overdue legal showdown with Moscow’s gas export monopoly and shifts its energy investments away from Russia, the state gas company’s chief executive tells POLITICO Ukrainian Yuriy Vitrenko.
Europe’s dependence on Russian gas is one of the most sensitive dimensions of the spiraling security crisis triggered by Russian President Vladimir Putin’s invasion of eastern Ukraine. In fact, the EU’s dependence on Gazprom gas pipelines is only growing. In 2021, more than 42% of total EU gas imports came from Russia, up from 26% in 2010.
Rather than just trying to carry on business as usual – gas flows are unaffected by EU sanctions – Naftogaz CEO Vitrenko argued it was time to penalize Gazprom for antitrust abuse.
The European Commission said in October it was gathering evidence for an investigation into whether Gazprom’s illegal and anti-competitive activities were helping to drive gas prices in the EU to staggering levels. Antitrust regulation is one of the few areas where Brussels has major powers to police corporate behavior – and it forced changes on Gazprom in a high-profile case that ran from 2012 to 2018.
Vitrenko, a former Ukrainian energy minister, said Brussels must again throw the book at Gazprom. “It is really, really strange that Europe is not using its antitrust laws and mechanisms, because it is clear that Gazprom is abusing its dominance in the European market,” he said. “They have adequate tools for Gazprom to sell more gas to Europe,” he said, speaking via video link from Naftogaz headquarters in Kyiv.
Vitrenko made no attempt to conceal his hopes that Ukraine would be a major beneficiary of any EU switch to Russian gas. He blamed Western leaders for their reluctance to sanction Russia’s energy sector and not invest in gas development in Ukraine instead.
“There should clearly be an embargo on the sale of equipment and services to Russia for new upstream projects… [and] on the financing of upstream projects in Russia, when there should be a facilitation of these upstream investments in projects in countries like Ukraine,” he argued. “We can produce more gas, a lot more, but then we would need modern technologies, management know-how and capital. And currently, unfortunately, because of Putin, but also because of Western reactions to Putin’s attacks, we have problems with that,” he added.
On US influence over Gazprom, Vitrenko said it was “critical” that President Joe Biden stop using his executive power to waive sanctions passed by lawmakers against the Nord Stream 2 gas pipeline to Russia. to Germany and its leaders.
The company behind the program, Nord Stream 2 AG, is owned by Gazprom.
“It is morally and politically important for the United States to show that it is fighting, that it is confronting the Putin regime,” he said.
Sanctioning the company could well force five major Western energy companies – French Engie, German-Finnish Uniper, Austrian OMV, Dutch-British Shell and German Wintershall – to unwind the loans they have made to Nord Stream 2 AG, totaling half of the €10 billion Pipeline cost.
But in doing so, Vitrenko explained, “we would lose, for the greater good, those Gazprom lobbyists in the EU and the US… who promote and defend Nord Stream 2.”
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