Accessibility links

Breaking News

Russia: Gazprom Lashes Out At Czechs Over Norwegian Gas Deal

Moscow, 21 March 1997 (RFE/RL) - Russia's natural gas giant Gazprom today accused the Czech Republic of playing politics by agreeing to buy Norwegian gas in a landmark deal signed earlier this week.

Gazprom issued a press release quoted by the Interfax news agency saying the decision could affect the company's competitive position in the European gas market.

The Czech Republic signed a 20-year deal two days ago to buy gas from Norway, effectively ending exclusive dependence on Russian natural gas. The deal provides for Norway to begin supplying gas to the Czech Republic starting May 1.

The press release condemned Czech Industry and Trade Minister Vladimir Dlouhy for stating that the higher cost of Norwegian gas would be compensated by its more reliable supply. Dlouhy reportedly called the deal with Norway "economically very advantageous." The financial details of the deal have not been released, but news reports have speculated that Prague has agreed to pay a significantly higher price for Norwegian gas than it has for Gazprom's supplies.

As Gazprom put it: "We view this statement as hostile and not corresponding to reality." It said the reliability of Gazprom's natural gas supplies has been proven by a trade relationship of some 30 years. As the press release put it: "Similar decisions would undoubtedly affect Gazprom's inherent interests in European gas markets."

Under the agreement, the Czech Republic will begin purchasing 1.4 million cubic meters of gas a day from May 1. The amount will eventually rise to roughly three billion cubic meters every year.

Gazprom said it respected the Czech Republic's right to choose a gas supplier, but it said it believes the decision was economically unjustified. Gazprom said it would do everything possible to widen cooperation with Prague.

Russian authorities have said that gas supplies form the basis of trade ties with Prague and should be used as a platform for boosting economic relations between the two countries.

Gazprom is currently the Czech Republic's only gas supplier and pumps about 7,000 million cubic meters of gas a year. Gazprom will still be the main natural gas supplier to the Czechs, but it is now directly competing with Norway.

News reports have said three Norwegian firms -- Statoil, Norsk Hydro ASA and Saga Petroleum ASA -- are involved in the deal. Norway is widely believed to be campaigning to capture a larger share of the East European gas market from Russia, and is hoping to clinch deals with Poland and Hungary soon.

Czech President Vaclav Havel announced the deal during a recent visit to Norway. Czech officials have said they made the decision after considering possible deals with German, Dutch and British suppliers.

Russia's ambassador to Prague Nikolai Ryabov said in an interview on Russia's NTV channel earlier this week that the Czech Republic's entry into NATO could undermine trade relations with Russia, particularly gas supplies.

The Czechs won political independence from Russia following its peaceful overthrow of communism in 1989, but still depend on Russia for energy and raw material supplies.

With the domestic economy undergoing a severe crisis and most enterprises unable to pay energy bills, Gazprom depends heavily on cash from foreign markets to make up the difference. The Russian economy has become increasingly reliant on exports, almost half of which are energy supplies.