Gazprom, one of the largest companies in the world, delivers gas to 25 European countries, apart from Spain and Portugal, on long term 20-25 year contracts. The Russian owned company supplies a colossal percentage of Bulgaria’s gas (97%), 89% to Hungary and 86% to Poland. The European Union as a whole buys about 25% of its gas from the Russian government.
It is basically a legal export monopoly which has Europe’s natural gas market in a stranglehold. The EU government has predominantly been looking to break this overpower but are at the same time hesitant to get up against a gas giant like Gazprom who they so significantly rely on.
Over the years, Gazprom has faced a few matters of contention including EU anti-competition probes, law suits for over high gas prices and now, more recently, Iraq issued a public warning to Gazprom stating they want the giant to quit deals with Iraq’s semi-autonomous Kurdistan region. Why the ultimatum? Because the area Gazprom is interested in is at the centre of a dispute over oil and territory between the Arab-led central government of Iraq and ethnic Kurds, who have run their own administration in north Iraq since 1991.
In response, Gazprom issued a letter saying the contract with Kurdistan is frozen. But is it really? Along with ExxonMobil and France’s Total, Gazprom acquired interests in August earlier this year and the Russian company is expected to start production at Badra with 15,000 barrels a day in less than a year. Only time will tell but Gazprom Neft Chief Operating Officer Alexander Dyukov does not wish to comment. The gas, oil and energy translation services in Russia must not be working very well at the moment. Language has always played an important part in negotiations within the international oil industry and it is necessary for the Kurdish nationals from Badra, the Iraqi officials in Baghdad, the American representatives of Exxonn and the Russians alike to make sure they engage in a clear professional and diplomatic dialogue.