EU Charges Gazprom, European regulators are expected to charge Russian energy giant Gazprom on Wednesday with anti-competitive practices, increasing already tense relations between the West and Moscow.
The decision to bring charges against Russia's state-owned energy firm was first reported by the Wall Street Journal, citing people familiar with the matter. Neither the European Commission based in Brussels nor Gazprom were immediately available for comment.
When the European Union launched a probe of the energy giant in 2012, it said it was investigating three suspected anti-competitive practices in Central and Eastern Europe: hindering the free flow of gas to member nations, preventing the diversification of gas supplies and imposing unfair prices on customers by linking the price of gas to oil prices.
Since then, Russia's support for separatists fighting in neighboring Ukraine and its seizure of Crimea from Ukraine have complicated the case. Last year, the EU and United States launched several rounds of sanctions against Moscow over the conflict in Ukraine, but it withheld accusations of wrongdoing against Gazprom because Russian and European leaders were negotiating a cease-fire in Ukraine.
Russia has previously said the Gazprom probe is politically motivated.
The European Commission, the EU's executive body, tried to negotiate a settlement with Gazprom but failed to do so, according to a report in the New York Times.
Gazprom supplies about a third of Europe's gas, which accounts for more than half of the company's revenue. In an attempt to reduce its reliance on Europe, Gazprom signed a 30-year supply deal with China last year.
The company has struggled to weather several difficult challenges of late, including the Western sanctions, plummeting global oil prices and a collapse in the value of the Russian ruble, all of which have hit corporate income. Earnings in 2014 fell 70% from the year before and estimates cited by Bloomberg forecast that Gazprom is on track this year to book its lowest dollar-denominated revenue in a decade — even as the ruble has recovered ground.
During a trip to Washington last week, Margrethe Vestager, the EU's competition commissioner, said, "Acting decisively against energy companies that harm rivals, block energy flows from one EU country to another or threaten to close the tap can help deter others."
When the European Union launched a probe of the energy giant in 2012, it said it was investigating three suspected anti-competitive practices in Central and Eastern Europe: hindering the free flow of gas to member nations, preventing the diversification of gas supplies and imposing unfair prices on customers by linking the price of gas to oil prices.
Since then, Russia's support for separatists fighting in neighboring Ukraine and its seizure of Crimea from Ukraine have complicated the case. Last year, the EU and United States launched several rounds of sanctions against Moscow over the conflict in Ukraine, but it withheld accusations of wrongdoing against Gazprom because Russian and European leaders were negotiating a cease-fire in Ukraine.
Russia has previously said the Gazprom probe is politically motivated.
The European Commission, the EU's executive body, tried to negotiate a settlement with Gazprom but failed to do so, according to a report in the New York Times.
Gazprom supplies about a third of Europe's gas, which accounts for more than half of the company's revenue. In an attempt to reduce its reliance on Europe, Gazprom signed a 30-year supply deal with China last year.
The company has struggled to weather several difficult challenges of late, including the Western sanctions, plummeting global oil prices and a collapse in the value of the Russian ruble, all of which have hit corporate income. Earnings in 2014 fell 70% from the year before and estimates cited by Bloomberg forecast that Gazprom is on track this year to book its lowest dollar-denominated revenue in a decade — even as the ruble has recovered ground.
During a trip to Washington last week, Margrethe Vestager, the EU's competition commissioner, said, "Acting decisively against energy companies that harm rivals, block energy flows from one EU country to another or threaten to close the tap can help deter others."
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