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    Wrap: Putin sees healthy balance in Russia's energy sector

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    MOSCOW, January 31 (RIA Novosti) - Russian President Vladimir Putin played down fears Tuesday that the Russian state could look to tighten its hold on the country's oil and gas assets, and use its dominance in the sector to increase political leverage over neighboring countries.

    The government would not look to nationalize or "interfere with" Russia's remaining independent energy companies, Putin said, stressing that the current balance between state-controlled and privately-owned companies was a healthy one for the country's economy.

    The last two years have seen major structural changes in the Russian energy sector. Rosneft's acquisition of former Yukos subsidiary Yuganskneftegaz turned the state-owned oil firm into a major contributor to global oil supply. And Gazprom's acquisition last year of another leading producer, Sibneft, increased concerns that the government effectively intended to renationalize the whole industry.

    But monopolization of the industry was not in the government's sights, or the country's interests, Putin said.

    "There are about a dozen large private oil companies in Russia, including LUKoil, TNK-BP, and Surgutneftegaz," Putin said. "The government is not going to nationalize them or interfere with their operations."

    Putin said they would continue operating as private companies, in line with the need of the market. "This is the best possible balance for the Russian economy," he said.

    The president also highlighted, h owever, that as a matter of principle he was not opposed to state ownership of energy assets. The oil and gas sectors were under government control in many major producing countries, both within the Organization of Petroleum Exporting Countries, as well as outside Opec, for example in Norway.

    He also said that UK major BP, owner of 50% of the TNK-BP joint venture, was satisfied with the market conditions in Russia. BP produces one third of its oil through the joint venture, Putin said. "This is a huge amount," he said.

    And other joint ventures with foreign companies within Russia would be encouraged, he suggested. "The Russian government has allowed joint ventures to develop vast resources," Putin said. "This is the road we will continue pursuing."

    At the same time, Putin expressed a desire to see the newly-reinforced Gazprom and Rosneft develop into major players on a truly global stage.

    "As a matter of fact, Gazprom is an international company," the president said, adding that Rosneft would follow suit. Rosneft was preparing for an initial public offering on an international stock exchange, he said.

    "It is multinational companies that set the tune in the world's energy sector," the president said.

    Asked whether he himself intended to head into the business world or take over the reins at energy giant Gazprom at the end of his presidential tenure, Putin said that he was not ready to become the chief executive of Gazprom or any other business in the future.

    "I will hardly be able to take charge of any business organization," Putin said. "I don't feel like I am a businessman either in terms of my character or my previous experience in life."

    Separately, Putin denied there was any justification for suggestions from some quarters that Russia was using its increasing strength as an energy power to achieve political goals. The country has begun a process of abolishing what were effectively subsidies on gas prices to several former Soviet countries.

    But that was a question of a fair market-based relationship, rather than the flexing of political muscle, Putin said.

    "We do not hurt our customers, if we are talking about the countries of the former U.S.S.R. We just create equal conditions for them, and believe this is right," Putin said.

    At the same time, Putin said he did not think the switch to market prices would harm Russia's interests in the former Soviet republics.

    "On the contrary, I am convinced that it will help us achieve our foreign political objectives and goals," Putin said.

    Putin said Russia and Ukraine - which attempted to hold out against Russia's efforts to hike prices, creating a dispute that briefly threatened European gas supplies - had long been discussing a switch to market-based trade.

    Subsidizing Ukraine's energy system had cost Russia $3-5 billion per year over the past decade and a half, he said.

    Putin also said that Ukraine should pay for Russian gas, intended for onward delivery to Europe, that it siphoned off during a recent cold spell. Ukraine should pay the $95 per 1,000 cu m that the two countries agreed in a contract at the start of January to put an end to a long-running dispute over prices.

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