Russ Oil-Gas

15 October 2007 - Upstream OnLine - The European Union has no need to act against Russian gas export monopoly Gazprom as the company does not have the same dominance as the bloc's antitrust target Microsoft, Energy Commissioner Andris Piebalgs said today. Gazprom's growing influence on the market has aroused concerns as it supplies one quarter of the EU's gas. But Piebalgs said today that its market share was relatively small compared with that of software maker Microsoft. "Do we treat Gazprom as we treat Microsoft? Yes we do. The difference is that Microsoft has 100% of the market," Reuters quoted Piebalgs telling a conference in the Latvian capital Riga. "That is why we do not take measures against Gazprom, there is no need. They do not play a big enough role in the market." The European Commission this year won a decisive court battle against Microsoft for abusing a dominant market position to crush rivals. Other speakers at the conference expressed fears of Russia's increased use of its energy resources. One worry has been the Nord Stream gas pipeline, which will run under the Baltic Sea, being built by a Gazprom-led consortium, which includes Germany BASF and E.ON . This has worried Poland in particular, which fears the pipeline currently carrying Russian gas to the West will be bypassed. Piebalgs had no such reservations. "I have no difficulties with this project as it stands," he said, adding that he regretted the political difficulties surrounding it. "We should look at it on its own merits." Piebalgs said the answer to worries about suppliers like Gazprom was the power of the European Union as a consumer with 500 million inhabitants, the rules of the internal market and further diversification of energy sources. Meanwhile Pieblags said a state holding in Austrian energy group OMV is no reason in itself to object to its bid for Hungary's MOL. "I would disagree that OMV's bid for MOL is wrong just because OMV has state participation," Piebalgs said. The Austrian government has 31.5% of OMV. Reuters quoted him as saying that under European Union law private companies and those with the state as shareholders were treated equally. OMV has made a hostile bid for MOL, though Hungary's parliament recently passed a law on takeovers which many investors say is designed to protect the oil producer. MOL and the Hungarian government also argue that merging the two companies would form a regional monopoly and that as the Austrian oil company is part-owned by the state it would effectively be a re-nationalisation of a private company.