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Eon and Gazprom in contract conflict
Duesseldorf, Germany (UPI) Dec 1, 2009 German energy firm Eon is rowing with Russian state-controlled energy giant Gazprom over a long-term gas contract. Eon's Ruhrgas unit may see its earnings fall by 30 percent because the German gas utility is stuck with a long-term contract to buy natural gas from Russia's Gazprom, German newspaper Die Welt reports. The contract requires Eon Ruhrgas to purchase a fixed amount of gas no matter the price or demand, the newspaper says. But demand has dropped because of the global recession, with prices for gas on spot markets lower than those stipulated by Eon Ruhrgas' contract with Gazprom. That means the Germans have to resell the Russian gas for less than what they paid for it. Hundreds of millions of dollars have already been lost, the company says. "We hardly see an improvement. The situation is serious," one unidentified supervisory board member told the newspaper. Eon has tried to renegotiate the contract to temporarily purchase less gas, but the Russians have no intentions to step back from previous agreements. "Gazprom insists that the contracts be fulfilled," Die Welt quoted an unidentified source as saying. Gazprom needs the money: The global economic downturn has not only reduced demand, it has also resulted in a fall of oil and gas prices and hence less income for Gazprom. Eon CEO Wulf Bernotat has personally tried to convince Gazprom to soften its contractual grip on the gas deliveries but without significant success. The Russians furthermore see no reason why existing contracts should not be honored; the company points to the West's frequent reminders that Gazprom had to do so. The company's oil arm, Gazprom Neft, Tuesday posted a 47 percent year-on-year decline in third-quarter net profits because of the low prices for crude. Duesseldorf-based Eon is one of the major public utilities in Europe and the world's largest private energy company. It employs more than 90,000 people. Daughter company Eon Ruhrgas is Germany's largest gas utility. It has 2,600 employees and is represented in more than 20 countries in Europe. Eon Ruhrgas is a 20 percent shareholder of the Nord Stream consortium, which is building a pipeline linking Russia and Germany under the Baltic Sea. Share This Article With Planet Earth
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Gazprom, Statoil seek to widen U.S. marketHouston (UPI) Dec 1, 2009 A subsidiary of Russian energy giant Gazprom and a Statoil affiliate have signed wide-ranging agreements to increase their gas and liquefied natural gas distribution footprint in the United States, the companies said Tuesday. Gazprom Marketing and Trading USA, a U.K.-registered wholly owned subsidiary of Gazprom, and Statoil ASA announced they had signed several agreements to increase ... read more |
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