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Europe

Putin: Russia Threatened by Europe's Energy Demands

Russia feels threatened by European Union moves to curtail its role in Europe's energy markets and has no choice but to seek other buyers, President Vladimir Putin said Thursday.

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Putin threatens to take his massive energy resources elsewhere

"We are constantly hearing about some threat of dependence on Russia, that something must be done to limit the entry of Russian companies into the European market," Putin said at a joint news conference with German Chancellor Angela Merkel after two days of talks focused on energy.

"What are we supposed to do when we hear the same thing every day? We start looking for other markets. When we continually hear the same thing, we perceive this as a threat to limit our admittance to the market and we begin to look for other outlets," the Russian leader said.

Putin said Russia had no wish to cut back on supplies of energy to countries in Europe -- they depend overall on Russia for around one-fourth of their natural gas supplies and a large share of oil supplies -- and stressed that Moscow had always been a reliable supplier independent of politics.

"We have worked well with you for many years, even when there was the Cold War. ... Day after day, the Soviet Union delivered for its partners in Europe. What is the point of stoking fears about excessive dependence with regard to Russia today?" Putin asked.

Moscow's threat to shift energy priorities east

Hu Jintao bei Wladimir Putin in Moskau

Putin is looking at China and the Far East for energy partners

Putin and other top Russian officials have however stressed in recent weeks that China, Japan and other huge markets in Asia are increasingly hungry for Russian energy supplies and have warned that Moscow may shift its priority to serving those clients at the expense of European buyers.

The European Union, some of whose members felt disruption to their gas supplies from Russia in January when Moscow briefly cut shipments to Ukraine amid a price dispute, has responded by telling Moscow not to "politicize" energy trade.

While Russia's state-run gas giant Gazprom, for example, has complained of efforts to block its expansion plans in European markets, it has also flatly rejected European demands that it relax its own domestic monopoly and open excess gas pipeline capacity to foreign firms.

Tensions with West exacerbated by energy struggles

Putin's comments were certain to heighten tensions on energy between Russia -- the world's second-largest crude oil exporter and largest supplier of natural gas -- and the West, which is anxious over linkage of Kremlin energy strategy with political objectives.

Deutschland Russland Merkel und Putin in Tomsk

Putin and Merkel found little common ground on energy issues

In comments to officials on Wednesday shortly before he greeted Merkel, Putin complained that Russia's aims to expand in Western energy markets were being systematically thwarted by "unfair competition" barriers.

"We are being blocked to the north, the south and the west on any pretext. We have to find outlets, to fit into the global development process," Putin said Wednesday hours before greeting Merkel.

By way of example he cited reports that the British government had recently considered modifying anti-monopoly legislation in such a way as to prevent Gazprom from buying Centrica, Britain's biggest household gas supplier.

British Prime Minister Tony Blair ruled out any move to block the takeover, the daily Financial Times reported Wednesday, sparking a surge in Centrica's share price.

Putin said Gazprom had never intended to buy the company anyway. "We need to agree on the rules of the game" and those should be applied on an equal basis to all countries, he said.

EU failing in bid to rein in Russia

Gasstreit zwischen Rußland und Ukraine beigelegt

The EU wants to ensure the supply stays open

The European Union has ratcheted up pressure on Russia to sign its Energy Charter, a document that regulates energy transport and would prohibit any signatory from disrupting contracted supplies for any reason.

A top Gazprom official, Alexander Medvedev, told participants at an economic forum in London earlier this week that the pact was "stillborn."

However, Putin's economic advisor referred to the prickly EU-Russian relationship as a normal sign of a changing balance of power.

"Having this tension is okay, it's a problem with any growth," said Igor Shuvalov, who is also Russia's sherpa to the Group of Eight industrialized countries. "Russia is part of the family; we were considered the small kid. Now we are growing and we raise our voice," he added.

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