Neil Barnett

Putin’s game in European energy: divide and conquer

Energy is an issue where Europe really does need to act together

Vladimir Putin’s efforts to divide the West may be on the back foot now that Nicolas Sarkozy and Angela Merkel have decided to stop being beastly to the Americans, but his most effective attack dog — Gazprom — is gleefully setting EU countries against each other.

For governments fixated on more immediate threats such as radical Islam, this might seem footling stuff. But the struggle by OMV, Austria’s biggest oil and gas company, to snap up its Hungarian counterpart MOL (pron. ‘mole’) provides a perfect insight into the underworld of the Central European energy business: all the more so because at first sight Gazprom’s hand is invisible.

OMV has been eyeing MOL on and off since the fall of the Berlin Wall, and has made several unsuccessful approaches in the past. Then this summer Megdet Rahimkulov, a Russian banker and former Gazprom executive, started buying MOL stock on the Budapest stock exchange. MOL is privatised, but has several defences against hostile takeovers, including a de facto golden share held by the state and a ban on voting in blocs of over 10 per cent of shares. So rumours of an OMV bid surfaced, but it seemed an unpromising prospect for the Austrians.

Following the visit of President Putin to Vienna in May, Russian investors who appear to act quasi-independently but are known for their previous ties to Gazprom — such as Rahimkulov — started to buy MOL shares. According to a MOL executive ‘These MOL shares quickly landed at OMV, which later explained this as a means to avoid the shares getting into hostile hands. This rationale is not novel from the Austrians, it’s more like the warming up of a well-known OMV formula. They used the exact same excuse in 2000, when the first 10 per cent was bought up by OMV.

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