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Last Updated: Thursday, 31 May 2007, 15:13 GMT 16:13 UK
Russia denies foreign energy bias
Oil faculty in Siberia
Uncertainty surrounds foreign investment in Russian energy
Russia does not discriminate against foreign firms in its pursuit of its energy needs, a key minister has said.

Critics have accused Moscow of strong-arming firms such as Shell and BP to secure Russian influence over key oil and gas projects.

But energy minister Viktor Khristenko said it treated both Russian and foreign firms "exactly the same".

Separately, the EU's energy chief said the bloc was not threatened by the growth of Russian energy firm Gazprom.

Political tool?

Russia provides a quarter of the EU's gas supplies but energy commissioner Andris Piebalgs said he did not believe Gazprom - its largest firm - exerted too much influence.

Regular disputes between Russia and its neighbours over gas exports have led critics to accuse Moscow of using its huge energy resources as an economic and political weapon.

Gazprom is very strong but I would not say too strong
Andris Piebalgs, EU Energy Commissioner

Shell's sale of its stake in the Sakhalin-2 project to Gazprom after pressure from Russian regulators and the prospect of BP having its licence for the Kovytka gas field - operated under a joint venture - withdrawn have made the status of foreign firms in Russia uncertain.

ExxonMobil, the world's largest oil firm, recently said Moscow needed to clarify its attitude to foreign investment before it would consider further projects there.

But Mr Khristenko told an energy conference that foreign firms were not being persecuted.

"Our approach to foreign and domestic investors is exactly the same," he said.

"Accusations floating in the air carry more risks for the participants on this global process than on the process itself."

He said Gazprom would base its assessment on whether to become involved in the Kovytka project purely on its technological merits.

Need to diversify

Speaking at the same event, Mr Piebalgs said Russia was not casting a shadow over Europe's energy market despite its huge market share.

"Gazprom is very strong but I would not say too strong," he noted. "The EU market is really functioning, so Gazprom has never been big enough to be a real challenge for us."

As part of an overhaul of its energy policy, the EU is proposing to force firms to split up their generation and distribution functions - a move which some experts say is partly designed to keep Gazprom's growth in check.

But Mr Piebalgs said its planned reforms were "not working against Russia".

"It is obvious Russia needs a fair price [for energy] but the EU needs to diversify its energy source and routes."

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10 Nov 06 |  Business

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