Gazprom Faces $7.58 Billion Fine From Polish Regulator Over Nord Stream 2 Pipeline -- Update
October 07 2020 - 8:43AM
Dow Jones News
--Poland's anti-monopoly office fines Russian giant for
undertaking work without consent
--Gazprom said it will appeal the fine
--Shell, Uniper and OMV disagree with regulator's findings
By Anthony O. Goriainoff, Giulia Petroni and Adria Calatayud
Poland's anti-monopoly office UOKiK said Wednesday that it had
imposed a 29 billion-zloty ($7.58 billion) fine on Gazprom PJSC
related to the building of the Nord Stream 2 gas pipeline.
UOKiK said the Russian energy giant was one of six companies
working on the gas pipeline fined for undertaking work "without the
required consent of the president of UOKiK."
The regulator also imposed fines amounting to PLN234 million on
France's Engie SA, Germany's Uniper SE and Wintershall AG,
Austria's OMV AG, and Anglo-Dutch oil major Royal Dutch Shell
PLC.
The Polish watchdog said the entities concerned are obliged to
terminate the agreements for financing the project, which was
intended to increase Russia's gas export capacity via the Baltic
Sea.
The Polish anti-monopoly authority said the companies
concluded--without permission to establish a joint venture--a
number of agreements concerning the pipeline's financing and a
number of other authorizations, such as, for instance, the ability
to interfere with the operation of NS2.
UOKiK said that in 2016 its president voiced concerns regarding
the plan and noted that the planned transaction could lead to the
restriction of competition and presented its reservations. The
companies then withdrew the application, meaning in practice that
they were prohibited from performing the merger, the regulator
said.
The regulator said information surfaced shortly thereafter
stating that the companies had signed an agreement for the
financing of the gas pipeline.
"Therefore, proceedings against Gazprom and its five trading
partners regarding the execution of the transaction without
obtaining approval from the authority were initiated," the
regulator said.
"The financial penalties imposed are intended not only to
convince the parties involved to observe the law, but also to
discourage other players from attempting similar behaviors that
violate anti-monopoly regulations in the future," UOKiK president
Tomasz Chrostny said.
Gazprom said it disagrees with the fine because it didn't
violate Polish antitrust laws. The company said it will appeal the
fine.
"The decision of UOKiK violates the principles of legality,
proportionality and fair trial, and the unprecedented amount of the
fine indicates a desire to oppose the implementation of the Nord
Stream 2 project by any means," the company said Wednesday,
according to Russian state news agency TASS.
Uniper said it is considering a possible appeal against the
UoKiK decision, as it doesn't share the assessment presented by
regulator. A decision can take up to four or five years and,
depending on the decisions, fines wouldn't be due until then, the
German energy company said.
Uniper said the agreements concluded between the Nord Stream 2
financial investors and Gazprom aren't a joint venture but
financing agreements, and that financing agreements don't
constitute a notifiable concentration under Polish merger control
law.
Spokespeople for Shell and OMV said they are reviewing the
UoKiK's decision.
"We strongly disagree with UOKiK's decision," a Shell
spokesperson said.
OMV said it is of the clear opinion that it has complied with
all applicable laws.
Engie and Wintershall didn't immediately respond to requests for
comment.
Write to Anthony O. Goriainoff at
anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
October 07, 2020 08:28 ET (12:28 GMT)
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