Russia to increase energy supplies to Europe

Russia will remain a reliable supplier of energy to Europe, increasing its deliveries of oil and gas over time, Deputy Prime Minister Alexander Zhukov was quoted as saying.
"Russia will not only maintain but increase supplies of fuel and energy resources," Zhukov told the Parliamentary Assembly of the Council of Europe.

He said fears of Russia being an unreliable supplier were "groundless", despite its interruption of supplies to Ukraine at the beginning of this year. The Ukrainian government admitted siphoning gas destined for central and western Europe despite not having a valid contract.
"We are trying to change over to trade on market-based conditions with all countries, including those in the Commonwealth of Independent States, but that doesn't mean that we will cut the volume of supplies or renege on our obligations," Zhukov said. Russian gas monopoly Gazprom insists that it honoured all its contractual obligations to Europe during the winter.

Zhukov's comments come three days before President Vladimir Putin meets with European Union Commission President Jose Manuel Barroso in Sochi, their first meeting since a falling-out over energy policy in March.
Russia's refusal to countenance a relaxation of state-controlled Gazprom's export monopoly had reinforced fears that European gas customers would have no effective defence in future if Russia chose to cut off supplies for political reasons.

Elsewhere in his address to the Council of Europe, Zhukov stressed the rosy macro-economic outlook for Russia, noting that its budget would still be balanced even if oil prices fell to $ 27 a barrel from their current level of around $ 68/bbl. Zhukov noted that the assets of Russia's Stabilization Fund, to which accrue all revenues from the oil and gas sector in excess of those budgeted for, should rise to around 2 tn roubles ($ 74.1 bn) by the end of the year.
He noted that the government is working on plans to reserve up to 10 % of the Stabilization Fund for a "Fund for Future Generations", which would have greater freedom to invest in assets such as equities. By law, the Stabilization Fund is supposed to be invested in investment grade sovereign debt.