BBC Monitoring Service: Russia's Gazprom chief talks about energy deals with Ukraine, Germany: “…we are slightly behind BP and Shell. I think this is a temporary thing. Speaking about major world companies, Gazprom is in the top 10 biggest companies and now ranks seventh.”: Posted Jan 16, 2006

Text of report by Russia TV on 15 January

[Presenter of Vesti Nedeli programme Sergey Brilev] Now for the guest we announced earlier, the main guest of Vesti Nedeli, head of Gazprom Aleksey Miller. Aleksey Borisovich, welcome to our programme. Let me say a few explanatory words about what happened in Astana. President Putin said a wonderful thing at a news conference with [Ukrainian President Viktor] Yushchenko that the price [of gas] for Ukraine could be higher or lower. Still, what will the fluctuation range be and which way will the prices go?

[Miller] The price of Russian gas which we deliver to Ukraine is 230 dollars per 1,000 cu.m., and no doubt, taking into account the fact that we have moved to market principles in relations with Ukraine, the price can go up or down. This is the market. Gas prices on the gas market are pegged to oil products and oil prices. If the price for oil and oil products goes up, consequently gas prices go up. If [oil] prices go down, consequently [gas] prices go down. So the price for Russian gas on Ukraine's market can be higher or lower for some period. The market will sort out everything.

[Brilev] Will this logic be applied to other countries of the former Soviet Union, many of which enjoyed similar unnaturally, I would say, privileged relations with the Russian gas industry all these years?

[Miller] Gazprom is moving to market principles with all republics of the former USSR which import Russian gas - absolutely all without exception. Only the market, the European market, will determine gas prices. All are equal on the market. The move to market principles is also a move to money payments and a complete ban on non-transparent barter deals.

[Brilev] The word non-transparent is the key word in this story because there are a lot of journalists in Russia and Ukraine who are speaking about the non-transparency of the Rosukrenergo company, which is now buying your gas and selling it to the Ukrainians. Gazprombank is the founder from the Russian side and a foreign bank, not Ukrainian, is the founder from the Ukrainian side. Are you satisfied with this arrangement?

[Miller] The structure of the Russian-Ukrainian joint venture, Rosukrenergo, must become absolutely transparent. In line with the agreement which was signed in early January between Gazprom and Ukraine's Naftohaz -

[Brilev, interrupting] In the early hours of 4 January.

[Miller] Yes, in the early hours of 4 January, very early hours. This joint venture is defined as the only importer of both Russian and Central Asian gas to Ukraine. From the Russian side, Gazprombank, a 100-per-cent subsidiary of Gazprom, is taking part in this. From the Russian side, as regards the structure of property, the picture is absolutely clear and transparent. As for the Ukrainian side, in this joint venture it is represented by a foreign bank. Russia has many times raised the question that it would be right if the founders were Gazprom and Ukraine's Naftohaz. The last time our president put this question to the Ukrainian president was at a meeting in Astana literally a few days ago. We don't know what answer the Ukrainian side will give us but the Russian side made the decision that Gazprom will be directly involved in this joint venture. Taking into account the scale of the deal and its public importance, it would be logical, it seems, if Ukraine gives a positive answer and decides that the Ukrainian side is represented not by a foreign bank but by the state company, Ukraine's Naftohaz.

[Brilev] Do you expect an answer soon, in a few hours or days, or maybe something will be said during [Ukrainian Prime Minister Yuriy] Yekhanurov's visit to Moscow?

[Miller] Maybe.

[Brilev] Probably the last thing - [changes tack] Many people are just returning from their New Year holidays tonight, tomorrow they are going to work. However, a sort of working week has formally already begun and trading in Gazprom shares has started in line with completely new rules this week. The growth is such that I personally was upset that I did not buy Gazprom shares in December. How do you assess these first days of work in accordance with new rules?

[Miller] You know, we expected this result. Several years ago Gazprom set itself the task of becoming a global energy company. What we see today on the shares market is the proof that Gazprom is becoming such a company de facto. The company's capitalization topped 200bn dollars. This is a historical milestone for both our country and Gazprom. The company now ranks 4th in the list of major oil and gas world companies. I can tell you that we are within a whisker of 2nd or 3rd place.

[Brilev] You mean that in front of you are only the Americans and the Anglo-Dutch group BP-Shell? [Preceding sentence as spoken; at end of programme Brilev corrected himself, giving following listing for top four oil and gas companies - US Exxon-Mobil, Anglo-Dutch Shell, Anglo-US BP, then Russia's Gazprom.]

[Miller] Yes, yes, we are slightly behind BP and Shell. I think this is a temporary thing. Speaking about major world companies, Gazprom is in the top 10 biggest companies and now ranks seventh.

[Brilev] The capitalization of Gazprom is the capitalization of Russia, as they say.

[Miller] Of course.

[Brilev] Aleksey Borisovich, you have come back to Moscow. You managed to visit Berlin after Astana. Last Friday [13 January] all Russian television channels showed your meetings in Germany. At what stage is the North European gas pipeline? Did you have talks about it?

[Miller] Yes, you know, I met Economics Minister [Michael] Glos in Germany and told him that work on the North European gas pipeline is proceeding strictly to schedule and we have no doubt that in the middle of 2010 gas will come to Germany directly from Russia.

[Brilev] To pick up on this subject, preparations are under way for the first visit by [German] Chancellor [Angela] Merkel next week.

[Miller] Without doubt.

[Brilev] I would like to remind you the memorable phrase by Yushchenko at the press conference with Putin that Russia and Ukraine must be responsible correspondents in relations with Europe. It seems this is how it has been in the last few days. Thank you. The Vesti Nedeli guest was Gazprom head Aleksey Miller.

Source: RTR Russia TV, Moscow, in Russian 1700 gmt 15 Jan 06

BBC Monitoring 

/BBC Monitoring/ © BBC.

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