Robert Amsterdam

In response to the European Commission's anti-trust chatter in recent weeks suggesting that large scale energy champions should break up into smaller companies to increase competition, Alexander Medvedev of Gazprom has hit back with a firm, defensive attack on Brussels yesterday:

"It is the most absurd idea" Mr Medvedev told journalists in a video conference from Moscow on Wednesday (21 February), when asked to comment on the European Commission's proposal to separate energy production from distribution networks, known as unbundling.

"It is like selling cars without wheels", Gazprom's vice-president said, adding it would be "against basic market rules" to demand that a company must abandon some of its activities after heavy investment.

More specifically, Medvedev singled out the Commissioner Neelie Kroes for her comments that long-term contracts pose a threat to competition:

Gazprom's deputy CEO referred to such remarks as "irresponsible" while saying "I hope that the EU will return to its previous statements about long-term contracts being fundamental for the gas market."

"We invest billions of dollars in infrastructure" Mr Medvedev said hinting the Russian giant expects stable revenues from long-term deals in return.

It is interesting that Medvedev has chosen to be so hostile toward the Commission, especially when he can count on the French to cut down any proposal of unbundling to protect EDF (they succeeded in leading a move to table the proposal).