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EU says moves to split up energy giants should also target non-European firms

EU says moves to split up energy giants should also target non-European firms

European Union plans to split up energy giants should also apply to companies based outside Europe, an EU spokesman said Thursday _ a move that could cut off access to Europe's wealthy customers for Russia's OAO Gazprom and the Saudi Arabian Oil Co.
The European Commission is already under growing pressure from EU governments about a plan it will put forward on Sept. 19 in an effort to boost competition and reduce prices. The plan might force companies to choose between running energy infrastructure, such as gas pipelines and electricity pylons, or supplying the power and gas that run through them.
EU spokesman Ferran Tarradellas Espuny said that, in the name of fairness, these rules should apply to all companies operating in Europe.
"If there's unbundling, there is going to be unbundling for everyone," he told reporters. "It's to guarantee that there is competition in the market."
Asking foreign firms to follow EU rules could mean that Russia's state gas monopoly Gazprom would have to split up its business in Europe. Gazprom _ which supplies a quarter of the EU's gas alone _ has already criticized EU moves against large energy companies, saying that would deter its investment of billions of euros in new pipelines to western Europe.
Energy is a sore point in Europe's relationship with Russia as the region becomes more reliant on Russian oil and gas. European companies face barriers to doing business there, while Gazprom, already eyeing possible purchases, would benefit as energy markets open up throughout Europe.
In Paris, EU Commission President Jose Manuel Barroso told France's major business lobby that the Commission would put forward proposals that guaranteed Europe's interests against those from outside Europe that did not respect "healthy and fair" competition.
He insisted, in an interview with the Italian daily La Stampa, that this was not an attempt to protect European companies against foreigners.
"I don't believe so. It is difficult to accept that a group from a third country could come to Europe and buy a company that possesses a distribution network while our companies can't do the same. We won't protect the economy; we will guarantee its functioning. It's a serious problem. And a sticky one," he said
He said the EU's plan foresees, "if necessary, the possibility of defense if we feel that the conduct of some foreign companies isn't in synch with the rules."
The EU executive says Europe must tackle major problems with the energy sector, saying prices are too high and companies that face no real competition are not putting record profits into improving the network.
Controlling both the network and the supply allows the companies to shut out new rivals, often by denying them access to key infrastructure, the EU claims. This keeps many former state-owned energy companies _ such as Electricite de France SA, RWE AG and E.On AG _ firmly in control of their home turf.
The EU wants "ownership unbundling" that would break up these energy majors, forcing them to concentrate on different parts of the supply chain.
But some EU governments are perfectly happy to keep homegrown energy champions. France and Germany have both lobbied against the EU plan, writing to the Commission to ask it to put forward different options when it lays out its proposal next month.
But EU officials said other countries have encouraged the Commission to stay on course.
Tarradellas Espuny refused to give details of what the EU will propose. EU nations will debate the plan at a later stage and can demand changes or block draft laws that they do not like.


Updated : 2020-11-30 20:31 GMT+08:00