BELGIUM/FILE: Former Russian Prime Minister Mikhail Kasyanov says Gazprom must be restructured, Russia should increase its supplies of oil and gas and better links should be built with Europe

Record ID: 837579

  • Title: BELGIUM/FILE: Former Russian Prime Minister Mikhail Kasyanov says Gazprom must be restructured, Russia should increase its supplies of oil and gas and better links should be built with Europe
  • Date: 11th May 2006
  • Summary: (SOUNDBITE) (English) FORMER RUSSIAN PRIME MINISTER MIKHAIL KASYANOV RESPONDING TO RUSSIAN PRESIDENT VLADIMIR PUTIN'S ADDRESS TO THE NATION IN WHICH HE SAID GAZPROM SHOULD ENTER NEW MARKETS AS WELL AS SUPPLY EUROPEAN MARKETS SAYING: "I absolutely agree that Russia should play a positive role in European energy strategy. That's what we discussed this morning and during our conference. I think we should develop a new stability treaty, if I may put it this way, on stable supplies of basic volumes of oil and gas, so that growing European demand could be satisfied and people will understand that Russia is going to produce additional volumes of natural gas and oil, to be exported to European consumers."
  • Embargoed: 26th May 2006 13:00
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  • Topics: International Relations,Energy
  • Reuters ID: LVAB6DZKYJIGZKHBMMYDPZKTNLWQ
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  • Story Text: Former Russian prime minister, Mikhail Kasyanov, has agreed with Russian president, Vladimir Putin, that Russia should increase its supplies of oil and gas.
    Speaking in Brussels on Wednesday (May 10) Kasyanov was responding to a speech by Putin where he set out an assertive economic agenda backing gas monopoly Gazprom's <GAZP.MM> international ambitions.
    Putin's speech made no direct mention of the G8 summit, nor of Russia's increasingly fraught relations with Washington after U.S. Vice President Dick Cheney accused Moscow of "blackmail" against energy consuming countries. But he threw his weight behind the push by gas exporter Gazprom -- now the world's third-largest company by market capitalisation -- to acquire gas distribution assets in Europe and seek alternative markets.
    Kasyanov, a presidential contender, said that he agreed Russia should increase its supplies of oil and gas.
    "I absolutely agree that Russia should play a positive role in European energy strategy. That's what we discussed this morning and during our conference. I think we should develop a new stability treaty, if I may put it this way, on stable supplies of basic volumes of oil and gas, so that growing European demand could be satisfied and people will understand that Russia is going to produce additional volumes of natural gas and oil, to be exported to European consumers," Kasyanov said.
    But he added that Gazprom needed to be restructured in order to ensure a stable supply of energy to Europe within a politically and economically democratic Russia.
    Kasyanov says it was a political mistake for Russia to limit supplies of gas to European countries and accused Putin's government of squeezing democratic freedoms in Russia.
    He suggested that one way of democratising the industry within Russia was to split Gazprom in two, and separate gas production from its transport.
    He said this would reduce what he sees as Gazprom's excessive control of supply as well as encourage new entrants to invest.
    "Gazprom and the whole gas sector should be restructured. Appropriate reforms should be launched in this direction so that, to split the production of natural gas and transportation of natural gas, so that Gazprom would not be responsible both for the production and transportation. So that to make an opportunity - to create an opportunity - for other producers in Russia, for investors in gas production," Kasyanov said.
    Kasyanov was invited to Brussels by the European Enterprise Institute which launched a debate on the geopolitics of energy security. European Member of Parliament (MEP) Ari Vatanen, chairing the debate, said it was crucial Europe help Russia democratise in order to stabilise the energy market.
    "The Kremlin uses energy as part of their foreign policy and of course that's not normal between democratic entities," Vatanen said.
    Last month, Putin called on the European Union not to block Gazprom's expansion in Europe and said competition for Russian gas supplies was set to grow amid increased demand in Asia and the United States.
    Gazprom's expansion plans, such as a possible takeover bid for Britain's Centrica, have raised concerns in Europe after the gas monopoly briefly stopped supplies to Ukraine during a gas pricing dispute in January.
    The dispute led to massive disruptions of Russian gas to Europe, prompting the EU to voice concerns that the continent is relying too heavily on one major supplier.
    "Europe must be, first of all, less, you know, dependent on any outside supplier because that's same as you wouldn't give the keys of your house away to any outsider. You want the keys of your house to yourself and when it comes to energy that is like giving your keys away. So we must be much more self-sufficient, auto-sufficient within Europe," Vatanen said.
    Kasyanov will run in the next Russian presidential election and could be a serious contender to the post. He said his European tour was not part of his presidential campaign but that he wanted European leaders to know what his position was and to try and establish a common agreement between Russia and Europe.
    "I confirmed that I will run for elections because it's very important to change the current course of the country because that's wrong direction of our movement. And that is not campaign yet but it is overall, I would say, plan to meet with people inside Russia and outside Russia to explore more about current situation in Russia," Kasyanov said.
    Forty-eight-year old Kasyanov said last year he would run for president, setting him on a collision course with the Kremlin, which analysts say is eager to ensure a smooth succession when Putin's second term ends in 2008.
    The ex-premier, whose popularity rating stands in single digits, will need a strong power base if he is to challenge a successor to Putin in 2008, when the current Kremlin leader will have to step down under the current constitution.
    A bid by Kasyanov to take control of the Democratic Party failed last December when supporters were prevented from attending the party's congress by unidentified people.
    Kasyanov first made his name as a foreign debt expert, rising swiftly through the finance ministry in the 1990s. As finance minister, he led negotiations to restructure massive Soviet-era commercial debts, securing a large discount and a reputation as a suave but tough negotiator.
    He served as prime minister for the first four years of Putin's rule but was not seen as part of the president's inner circle. He was sacked in February 2004, weeks before Putin was elected to a second term.
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