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05.10.2015

Russia is unable to learn even from its own mistakes

 

The uncompromising attitude of the Russians in gas issues could cost them not only the market share but also threaten huge fines. Such opinion was expressed by Roman Nitsovych, an expert of the DiXi Group Think Tank.

 

“Gazprom’s actions in energy policy copy Russia’s actions in foreign policy. And it is not only the practice of using gas stick ideology as part of a hybrid war against the West. The objectives of building a monopoly – from gas wells in Siberia to a stove burner of a household in Europe – require just such a monolithic, uncompromising facade.

 

However, the Russian Colossus has already given the first crack. Putin has acknowledged that Russian economy is suffering from low prices for hydrocarbons, although conclusions from this have not been drawn yet. For example, Gazprom is convinced that all its flows are competitive, although experts and economists point to the contrary.

 

The final result of antitrust case against Gazprom instituted by the European Commission may be more dramatic. The Russian monopolist has sent an official response, in which it refused to admit guilt on all counts.

 

Moreover, Gazprom hopes for an amicable settlement, but Europeans are unlikely to surrender, since the process is too lengthy, the stakes are very high, because it implies application of EU laws. This uncompromising attitude could cost Russians 10% of the annual turnover.

 

Given the fact that in 2014 the turnover of Gazprom totaled 5,589 billion rubles or 75.5 billion euros, the fine could reach 7.5 billion euros. After such a blow, Russians could not just say goodbye to one of the ‘streams’ but also think about saving Gazprom from the likely default. At least in the last 2 years, the company has been steadily moving towards that.”

 

Roman Nitsovych
Research Director

Тижневик

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National website of Extractive Industries Transparensy Initiative in Ukraine 

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Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform

Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform