Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Total CEO warns against new Berlin Wall with Russia

Published 08/07/2014, 06:39
Total CEO warns against new Berlin Wall with Russia
BP
-
SHEL
-
TTEF
-

By Dmitry Zhdannikov

PARIS (Reuters) - Europe should stop thinking about cutting its dependence on Russian gas and focus instead on making those deliveries safer, including options to bypass Ukraine, the head of French oil major Total told Reuters.

In his strongest backing for Russia and its energy policies so far amid the conflict in Ukraine, Christophe de Margerie said Europe could see a repeat of a big gas supply crisis this winter.

"We will have a problem this winter if there is a cut in supplies and if it is cold - that is obvious," De Margerie told Reuters in an interview.

"There are plenty of solutions that are being suggested to avoid the Ukrainian problem, including by Russia," he said, citing as an example the Nord Stream pipeline built in 2011 under the Baltic Sea to Germany, which bypassed Ukraine.

"(Nord Stream) was built to avoid passing through Ukraine, not to avoid Russian gas," he said.

"Can we live without Russian gas in Europe? The answer is no. Are there any reasons to live without it? I think - and I'm not defending the interests of Total in Russia - it is a no."

De Margerie dismissed a European Commission proposal for EU member states to pool their bargaining power to negotiate gas contracts with Russia and prevent Moscow playing countries off against each other with different prices.

"Should there be a central purchasing body? I don't think so," he said. "Today Russian gas prices are in line with international market prices. They've even cut their prices to keep customers."

NO BERLIN WALL

Several chief executives of energy giants, including BP and Royal Dutch Shell, have defended a long-term commitment to Russia despite Western sanctions to punish Moscow for annexing Crimea and destabilisation in eastern Ukraine.

Total is one of the majors most exposed to Russia, where its output will double to represent more than a tenth of its global portfolio by 2020.

Soon after the Ukrainian conflict erupted, the European Commission put Russia's second gas pipeline project to bypass Ukraine, South Stream, on hold, saying it violates EU law.

Russia has halted gas deliveries to Ukraine in a payments dispute but European gas prices haven't reacted sharply so far because of high stocks and low summer demand.

Kiev says it wants to renegotiate its gas pricing deal with Moscow, which it says is priced unfairly and higher than for most European consumers.

De Margerie said tensions between the West and Russia were pushing Moscow closer to China as illustrated by a $400 billion (233.5 billion pounds) deal to supply Beijing with gas clinched in May.

"You hear people say we have got to protect ourselves from Ukraine and then they talk about Russia. This is not the same thing... Are we going to build a new Berlin Wall?"

© Reuters. Christophe de Margerie, CEO of French oil and gas company Total SA, adjusts his glasses as he speaks during interview with Reuters in Paris

"Russia is a partner and we shouldn't waste time protecting ourselves from a neighbour ... What we are looking to do is not to be too dependent on any country, no matter which. Not from Russia, which has saved us on numerous occasions."

Any deliberate reduction in imports from Russia would result in more expensive supplies from other producers which end users would not like, he added.

(Editing by Paul Taylor and David Evans)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.