Thursday, December 2, 2010

"It’s Amazing: You Poke Gazprom, and Putin Screams" (OGZPY)

...Well readers you decide, has Russia figured out how to stick it to the Europeans in both the gas biz and the carbon biz, simultaneously? Da/Nyet? Your vote counts.


Alright, the nyet's have it!
Europe's playing pattycake. With a stone cold killer....
From Streetwise Professor:

Vladimir Putin was in fine form  in a speech in Berlin the other day, shrieking hysterically about the savage Europeans and their thieving energy policies:
Russian Prime Minister Vladimir Putin on Friday lashed out at European Union laws aimed at liberalising the continent’s energy market, saying they hinder investment and amount to uncivilised “robbery”.
Putin, speaking to an investor forum before talks with German Chancellor Angela Merkel, said the EU should consult Russia when drafting such important legislation.
“Our companies, together with German partners, legally acquired distribution assets in Lithuania. Now they are being thrown out there with reference to the Third Energy Package. What is this? What is this robbery?” Putin said.
“We often hear from our partners both in Europe and North America: ‘If you want to be members of a global family of civilised nations, you should behave in a civilised way.’ What is this then? Have our colleagues forgotten the basic principles?”
Nothing like sticking Putin’s beloved Gazprom to make him squeal like a piggy.

No doubt Putin believes that mandated unbundling of distribution pursuant to EU legislation, duly passed, is analogous to the expropriation of Yukos or Sakhalin II. Check that.  He actually thinks the latter were righteous and just: if you really want to hear him lose it, just say “Khodorkovsky.”   It’s unbundling that’s the crime.

Unbundling is a widely employed method to enhance competition in network industries.  It can work well, or it can work badly at enhancing competition.  But maybe that’s exactly what has Putin steamed: he’s not too big on promoting competition in the energy sector.

Moreover, it is not undertaken to expropriate property from one party to line the pockets of the state, or some individuals or firms favored by the state.  Moreover, the EU directive is meant to be applied uniformly across all companies, not selectively against individual companies who have fallen into disfavor, or who have something somebody else wants. Note that a German company, E.ON Ruhrgas, is also affected by the unbundling in Lithuania that vexes Putin, so it is not a measure directed at Russia or a Russian company alone.
In brief, Putin’s idea of “civilized” and the Anglo-Euro-American idea of civilized when it comes to property and regulation are quite different. There is a failure to communicate, and the failure is largely cultural....MORE
See also:
Hands on Management: "Putin puts out two wildfires in central Russia"
\UPDATED:"Gazprom and Igor Sechin: The Dale Carnegies of Gas"