August 31, 2007
Europe thinks about raising the drawbridge
Russia has reacted in predictably robust manner to the FT’s story about how the European Commission is mulling over a range of ideas for keeping Gazprom and other non-EU companies from taking control of strategic energy assets.
The Commission’s ideas, set out in a confidential working paper seen by the FT’s sister paper FT Deutschland, do not have a tremendous ring of conviction to them: the agenda in Brussels is still set by competitiveness, not security. The point of the paper seems to be to find ways for for the Commission to secure its flank against criticism that it is endangering energy security, while its main thrust is still aimed at promoting competition by "unbundling" the national energy champions.
The threat of demanding reciprocity from companies seeking to buy strategic energy assets is a familiar one. As the old joke has it, everyone thinks that everyone else has to show reciprocity, but they never want it for themselves. But using the principle as a way to keep out the Russians may not be easy. In spite of the high-profile cautionary stories such as Sakhalin 2 and Kovykta, not every western company finds it is being pushed back in Russia. Not in the electricity industry, certainly: just ask Enel.
All the same, there is no doubt that since the Ukraine gas crisis 18 months ago, Europe has viewed Russia in a very different light. If Gazprom tries to buy Centrica or RWE, you can bet some way will be found to block it.
