Russ Oil-Gas

09.21.2007 - Reuters, Bloomberg - BRUSSELS — The European Commission took on Russia and dominant European power giants Wednesday in a new move to open gas and electricity markets to more competition while limiting foreign ownership of EU assets. The European Union executive adopted hard-fought energy proposals aimed at forcing big utilities such as Germany’s E.On and Electricite de France to separate power generation from their distribution networks. Under the plan, generators will be forced to sell their transmission networks or hand over control to an independent operator, which the Commission argues will boost investment in infrastructure and allow new entrants into the sector. But gas monopoly Gazprom, which supplies about one-fourth of the 27-nation bloc’s gas, and Algeria’s state-owned Sonatrach will not have free rein to buy pipelines and power grids. In a statement issued before the proposals were published, Gazprom stressed that it was a reliable gas supplier to the EU and wanted a say in future regulation. “Gazprom has an important contribution to make to the debate about regulation of the energy sector in Europe and feels certain that its voice will be heard,” company spokesman Sergei Kupriyanov said. The new rules will bar foreign firms from controlling European energy networks unless they play by EU rules and their home country reaches an agreement with Brussels, Commission President Jose Manuel Barroso said. “In practice, third-country individuals and companies should not be able to acquire control over Community transmission networks unless there is agreement between the Community and their country of origin,” he said. A Commission statement said Brussels could intervene when a potential purchaser “cannot demonstrate both its direct and indirect independence from supply and generation activities.” The Commission argued over details of the package up to the last minute in a sign of their political sensitivity.