EBRD urges Russia to carry out radical oil and gas reforms

Nov 28, 2001 01:00 AM

The European Bank for Reconstruction and Development (EBRD) stated in a report on reforms in former communist countries that Russia should move to introduce a clear and comprehensive regulatory framework for the country's vast oil and gas pipeline networks. Presently, the networks are controlled by just two companies; oil pipelines are operated by state-controlled Transneft, and gas pipelines are in the hands of Gazprom, in which the government holds a blocking stake.
This concentration makes the oil and gas transport sector vulnerable to manipulation by political forces, the EBRD's report said. Political issues are often played out in the arena of pipeline access quotas and transit tariffs, it stated.

Moreover, it said, Gazprom and Transneft often use their position as monopoly operators to advance their interests at producers' expense. Non-Russian producers have had a particularly difficult time securing access to Russian networks, it noted.
The only way to remedy the situation, the EBRD said, is to revamp the oil and gas transport sector and introduce a new regulatory system to govern questions of pipeline tariffs and access. Moscow should also seek to foster competition in the energy sector as a whole in order to make the business less vulnerable to political interference.

Source: NewsBase
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