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Energy Security

Gazprom seeks PR makeover

By Neil Buckley in Moscow

Published: January 16 2007 17:53 | Last updated: January 16 2007 17:53

Gazprom is in talks with public relations companies over a multi-million dollar campaign aimed at improving the image of the Russian state-controlled gas monopoly in Europe and the US, after it was badly dented by “gas wars” with former Soviet republics.

Dick Cheney, US vice-president, last May accused Russia of using energy as a political weapon after Gazprom briefly cut supplies to neighbouring Ukraine in a dispute over prices. Last month Belarus and Georgia were threatened with similar treatment if they failed to agree to pay much higher prices, which both eventually did.

Gazprom is now talking to a consortium headed by PBN Company, a Washington-based PR firm, and also understood to include Hill & Knowlton, the international public relations firm, and another Washington-based group, according to people familiar with the talks. The negotiations were first reported on Tuesday by Russia’s Kommersant newspaper.

The talks are being led on Gazprom’s side by Alexander Medvedev, head of the group’s export arm, who has emerged as the public face of the company in Europe.

The three-year contract would be aimed at reinforcing the group’s image as a commercial entity, distancing it from its links with the Kremlin. The Russian state controls just over 50 per cent of the group, and it is chaired by Dmitry Medvedev, Russia’s first deputy prime minister, while Alexei Miller, chief executive, is a close associate of President Vladimir Putin.

Both Gazprom and the Kremlin have struggled to get across their message that price rises for former Soviet republics are part of a commercial move away from longstanding subsidies and towards market prices, rather than being politically motivated.

Though a “gas war” with Belarus this year was averted when a compromise price agreement was reached 10 minutes before the deadline expired, Russia one week later cut oil supplies to Europe through a pipeline running across Belarus in a dispute over transit fees. The incident again shook European confidence.

Gazprom’s move comes after the Kremlin last year hired a group of PR companies led by Ketchum of the US to improve the presentation of its presidency of the Group of Eight.

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