Yesterday’s rumours that Russian gas giant Gazprom was to buy British firm Centrica (the company that owns British Gas) caused Centrica’s share prices to rocket – up 11% (£1 billion) in just one day’s trading.
Happily, the DTI have weighed in to dampen speculation:
The Department of Trade and Industry said last night that any new ownership at Centrica would face robust scrutiny and that “security of energy supply to the UK’s consumers is paramount”.
[...] “Any new ownership would face robust scrutiny by the regulatory regime before entering that market. The energy market regulator Ofgem and the competition authorities would have to be satisfied that consumers’ interests were assured,” said a spokesman.
This is good news, and I hope the DTI sticks to this line. It would most definitely not be in the security interests of the United Kingdom to allow Gazprom to buy our biggest energy supplier.
Russia has regularly demonstrated its willingness to use energy as a diplomatic tool, often arranging for energy supplies to be cut off to reinforce a political demand. Their ability to do so has only been enhanced by a number of strategic purchases of energy companies throughout the Former Soviet Union and Eastern Europe, and attempts to purchase energy companies in Western Europe should be seen not just as a financial, but as a political investment.
So far, Russia’s crude use of energy to bully other countries has been largely restricted to its weaker neighbours, but there is nothing to say that their relative confidence will not grow over the next couple of decades, especially North Sea gas supplies begin to run out, and the UK becomes increasingly reliant on imported energy.
Happily, it appears that Gazprom is backing away from it’s interest in Centrica, claiming its comments were “misinterpreted”. Perhaps they were just testing the waters…?