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Monday, November 27, 2006

Putin vows no breakup of Gazprom

HELSINKI, November 24 (RIA Novosti) - Russia's president said Friday energy giant Gazprom and other state monopolies will not be separated into smaller companies. Vladimir Putin, speaking after a meeting with European Union Commission President Jose Manuel Barroso at the Russia-EU summit in Helsinki, said: "As long as there remains a disparity in energy prices on the Russian and world markets, we will preserve the integrity of such companies as Gazprom," In early 2007, the EU is set to announce measures to make energy companies' operations more competitive, and to weaken the dominant positions of monopolies, proposals which have met with criticism from Gazprom, the EU's largest natural gas supplier. Putin said that under an agreement with the EU, Russia will be gradually harmonizing "world and domestic price indicators - not prices themselves, but pricing formulas." Russia's domestic natural gas price of $46 per 1,000 cubic meters is several times lower than the average level of its gas exports to the European Union, of $230 per 1,000 cubic meters. Putin said any changes to Gazprom's organizational structure are a matter for Russia alone to decide. "Matters concerning the reorganization of our companies fall within the exclusive remit of the Russian Federation. No one can decide this for us, but we will act in close cooperation with our partners," he said. The European Union has been trying to persuade Russia, to sign the Energy Charter Treaty, which would force the country to liberalize its oil and gas sector. Russia opposes the idea, saying that some of the document's provisions - such as opening access for European companies to its pipelines - run counter to its interests.

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