Gazprom sells gas at a loss in Russia

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Russian gas provider Gazprom, which apparently was preparing a bid for British Gas owner Centric last week, was selling natural gas in Russia at a loss last year, it has emerged.

Russian news agency Prime-Tass says that Kiril Selezynov, head of Gazprom's sales and distribution arm Mezhregiongaz, made the announcement at a news conference today (Tuesday) in Moscow. He went on to say that gas sales would only become profitable if they were raised from the current controlled level by 60 per cent.

Last week rumours that Gazprom was readying a bid for Centrica gained credence when the Russian company's deputy chief executive, Alexander Medvedev, announced that his company had nearly brokered a deal that would give it a greater presence in the UK market.

Various other companies, including Royal Dutch Shell, BG, Gaz de France and Norsk Hydro, were said to be considering making a move on Centrica to block Gazprom's attempted entry.

These moves are said to have the backing of nervous UK politicians, who are wary of Gazprom gaining a foothold in the British market in light of the company's strong relations with the Kremlin and the deteriorating political relations between the two countries.

Russian president Vladimir Putin has previously said that controlling major western nations' gas and energy supplies was the key to Russia gaining a dominant world position.

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