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European Energy Firms Consider Russian Rouble Demand

European Energy Firms Consider Russian Rouble Demand
Source: The Guardian

One of Europe’s largest Russian gas importers says it must decide by May whether to accede to Moscow’s requests for payment without jeopardizing Western sanctions.

OMV, a company based in Austria, claimed it had received a request from Russia’s Gazprombank to pay for gas in roubles.

Russia has asked that countries pay in roubles for oil and gas, and some companies are contemplating doing so due to supply disruptions.

However, there is fear that the arrangement, in which companies pay in euros that are then translated into roubles, violates sanctions.

On Friday, OMV’s CEO Alfred Stern stated that the company is still paying for natural gas in euros, but that its next payment is due in May.

“We’re looking at it and come up with sanctions-compliant options,” he added.

After gas supplies to Poland and Bulgaria were shut off, Uniper, one of Germany’s largest energy companies, stated on Thursday that it will employ the contentious payment system.

After Western allies froze billions of dollars held in other currencies by Russia following its assault on Ukraine, Russia stated in late March that “unfriendly countries” would have to start paying for its oil and gas in roubles.

Non-Russian gas customers must deposit euros or dollars in a Gazprombank account in Switzerland, then convert the funds into roubles in a second account in Russia, according to the order.

The action is being interpreted as an attempt to split Western allies over how to respond to the war, which has exposed which European nations are significantly reliant on Russian energy supply.

Ursula von der Leyen, the head of the European Commission, has warned that cooperating with Russian requests would violate EU sanctions and put enterprises at “great risk.”

“For our firm and for Germany as a whole, it is not viable to live without Russian gas in the short term; this would have catastrophic ramifications for our economy,” a Uniper spokeswoman told the media.

OMV “will comply with all sanctions and regulatory procedures,” according to Mr Stern.

OMV also admitted that it maintains certain local accounts in Russia for “office functions” like as paying rent in roubles, which its CEO claimed had nothing to do with gas payments.

Mr. Stern denounced the “unprovoked aggression on Ukraine,” which he claimed had resulted in “immense human misery.”