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Putin Steps Up Gazprom Defense

TOMSK -- President Vladimir Putin on Thursday lashed out at attempts to block Gazprom from moving into Europe as a two-day summit with German Chancellor Angela Merkel closed amid a mounting storm over Russia's role in the continent's energy market.

Even as Gazprom signed a major deal with Germany's BASF that for the first time gave a foreign company a large stake in a vast Siberian gas field and also gave Gazprom a greater share in Germany's gas sales, Putin said attempts to limit Russia's role in Europe were prompting a search for other markets.

"We constantly hear about some threat of dependence on Russia and that Russian companies should have limited access to the energy market," Putin said at a news conference at the end of the second day of talks in Tomsk between Russian and German officials and business leaders.

"Think about it from our point of view. What are we to do when we hear the same thing every day? We start to look for other markets.

"When people come to us, it is investment and globalization, but if we plan to go somewhere, then it is already the expansion of Russian companies," Putin said.

Putin's comments came amid a growing war of words over Russia's increasing clout in Europe's energy markets. European leaders have been calling for ways to limit dependency on Russian gas due to fears that the Kremlin could use its economic muscle for political ends.

Amid recent speculation that Gazprom could buy into Centrica, Britain's largest gas supplier, British ministers have looked for ways to change legislation to block the bid.

This week, U.S. Secretary of State Condoleeza Rice joined the fray and publicly warned Greece and Turkey not to allow a Russian monopoly on gas supplies after Gazprom bid for a stake in a Greek-Turkish pipeline.

Putin reserved special scorn Thursday for British officials seeking to block a Gazprom bid for Centrica.

"There was a leak that Gazprom was possibly thinking of this, and just look at the reaction," Putin told reporters.

On Wednesday, Putin lashed out at limits imposed on Russian energy projects from "the north, south and west" and also suggested Russia should focus its attention on Asia instead.

Gazprom's cutoff of supplies to Ukraine over the New Year triggered the new high-stakes battle over Russia's energy role. It also led many to believe Germany's relations with Russia were cooling under Merkel, as she warned that Russia may have gambled away its reputation as a reliable gas supplier.

Many analysts predicted that Merkel would take a stronger line on democracy concerns than her predecessor, Gerhard Schröder, who schmoozed with Putin and cultivated close energy ties.

During talks Thursday, Merkel was quick to stress that Russia was "a reliable supplier of gas" and said energy cooperation was a priority of the countries' strategic partnership. Yet even though Merkel was flanked by a large delegation of German businessmen eager to strike deals, she was guarded as she pronounced new progress in relations.

Merkel told the news conference that she had encountered "some differences of opinion" during a four-hour dinner Wednesday evening with Putin at a local restaurant, where they discussed international relations and other matters over Siberian fare. But she did not elaborate on what those differences were.

"Sometimes opinions are different," she said. "But this is still a partnership and it was still an open discussion."

German business leaders present said they wanted the good ties with Russia established under Schröder to continue.

"We are interested in having continuation in our relations," said Klaus Mangold, chairman of Germany's committee on Eastern European economic relations, in an interview on the sidelines of the news conference.

"Business relations should not be interrupted by a change in government," said Mangold, who is also an executive adviser to the board of DaimlerChrysler.

A great deal is at stake on both sides. Trade turnover between Russia and Germany grew 38 percent last year to reach more than $32 billion amid a slew of banking and energy deals.

Gazprom CEO Alexei Miller, who was at the summit to sign Gazprom's asset-swap deal with BASF, appeared still to be fuming over Rice's comments about the risks of Gazprom gaining a monopoly.

"We are a global competitor on a global market," Miller said tersely, when asked what he thought of her comments.

Gazprom deputy CEO Alexander Medvedev said Rice's remarks were a clear example of "politicizing" energy deals. "This approach is not objective and is political," he said. "Not one pipeline project in the south can go ahead without the participation of Russian gas."


(The Moscow Times 02.v.06)

 
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