Immunity for Gazprom?

The European Commission’s antitrust investigation into Gazprom – Russia’s gas giant – was recently suspended. However, it does not mean that the case is closed. Reuters recently quoted the European Commissioner for Competition, Joaquin Almunia, as saying that the reason for the suspension was the conflict in Ukraine; although Cezary Lewanowicz, a spokesperson for the European Commission, denies this information and reiterates that no official statement has been released.

The decision to suspend the antitrust investigation would clearly indicate that Gazprom is untouchable in Europe. The French and German lobbies are most likely standing behind it, as French and German gas companies have been vividly supporting cooperation with Russia in spite of its actions in Ukraine. The American company Exxon Mobil has made a different choice – it complied with the sanctions imposed by the US Department of Treasury and decided to stop drilling in Russia.

Unlike in Poland, where Polskie Górnictwo Naftowe i Gazownictwo (PGNiG, the Polish Petroleum and Gas Mining company) executes a coherent policy on Gazprom, French and German energy companies have a strong influence on their countries’ respective foreign policy. In the case of Paris or Berlin, it is like the tail wagging the dog – their foreign policies are largely a result of not only the government’s objectives but also the interests of the heads of major corporations.

Some argue that the decision on suspending the investigation into Gazprom should be undertaken by the new European Commission. However, this claim is hypocritical because, as Almunia has said, the decision has been already made, mostly because the new European Commission has not yet started its work. There are two main reasons for this conjuncture. First being Miguel Arias Cañete who will become the next European Commissioner for Energy. Arias served previously as the Minister for Agriculture, Food and Environment in the Spanish Government. He is a representative of the petrochemical industry. Lately, Spain had shown aspirations to become one of Europe’s largest LNG hubs and provide European countries with an alternative energy source. The second is Jean Claude Juncker, President of the European Commission, who expressed support for some points of Donald Tusk’s idea of an energy union. It might be a part of a deal “gas for climate” in which Poland supports ambitious CO2 reduction targets in exchange for Juncker’s support of the energy union. In the end, Donald Tusk himself, as the President of the European Council, could oppose the suspension of the investigation because one of his main tasks would be to moderate the council’s policy.

There is a second argument against revealing the investigation results. Opponents of this step claimed that it would lead to the politicisation of the case and further escalation of the conflict in Ukraine. But this argument makes no point either, and it is in accordance with Russia’s expectations. Moscow’s narrative labels all EU’s decisions which are contradictory to Gazprom’s interests as politicised. Russia, as well as some EU member states, strongly resist strict regulatory policy towards the South Stream and the OPAL pipelines, an extension of Nord Stream, and want the investigation to be ineffective. It should be remembered that what is really the politicised issue is Russian energy policy and the business relations with Gazprom are nothing more but pure politics.

By its decision to suspend the antitrust investigation into Gazprom, the European Commission showed that the EU is ready for another rotten compromise – the so-called “gas Yalta” over Ukraine. Ukraine is most likely going to be forced to accept far-reaching concessions in exchange for a shaky stabilisation of the situation in eastern parts of the country. The “Belarusisation” of Ukraine’s gas sector is becoming more and more a likely scenario to Kyiv. It would mean a return to a total gas dependency on Russia and destroy any efforts Ukraine has made in order to diversify its energy sources.

All these actions are being enhanced by Russian propaganda. The Kremlin, some western media and even participants of recent “March for Peace” in Moscow repeated the slogan that the “party of war” in Kyiv is a threat to peace in Ukraine. In other words, they argue that those who favour a decisive policy towards Russia strive for war in Europe. It is impossible to fight effectively against such propaganda. This is why the Ukrainian president, Petro Poroshenko, resigned from his “strong leader” image and replaced it with a “dove of peace” image. The Ukrainian president also began favouring a political solution to the conflict, in spite of his earlier militant narrative. The lack of support from the West along with Kremlin diplomacy has made it impossible for Kyiv to keep its previous rhetoric.

The “gas Yalta” may materialise soon – the trilateral talks between the European Commission, Ukraine and Russia scheduled for September 26th create a perfect opportunity for it. On September 22nd, the EU gave Russia strong signals that it will most likely reach a viable (for Russia) agreement.

However, Cezary Lewanowicz, one of the spokespersons of the European Commission, says that the “antitrust investigation into Gazprom was not suspended” and that “its pace is even increasing.” Asked about the date of the publication of the results of the investigation, Lewanowicz answered: “after the investigation is finished.”

But when will it be finished remains unclear. The outcome of the antitrust investigation was meant to be published in the spring of 2014. Unfortunately, Lewanowicz has not answered this question. And what about Almunia words quoted by Reuters? Did he say too much about the unofficial European Commission policy towards Gazprom?

Wojciech Jakóbik is an energy analyst at Jagiellonian Institute and editor-in-chief of economic portal biznesalert.pl.

This article was originally published on New Eastern Europe.  Republished with permission.