E.ON keen to preserve Russian business interests

E.ON is determined that external events such as sanctions will not impact on its valuable business relationships with Russia.

The German utility is the biggest foreign investor in Russia’s power sector while Russia is E.ON’s (FWB:à‚ EOAN) biggest gas supplier.

Germany‘s largest energy group has spent about $8bn in Russian energy since 2007 alone and owning 9.6 GW of electrical power generating capacity in the countrTeysseny, more than 4 per cent of its total.

Germany, is heavily reliant on gas supplies from Russia, which accounted for about 39 per cent of German natural gas imports last year, while E.ON itself gets 30-40 per cent of its gas needs from Gazprom.

“Russia needs the money it gets for its gas. In turn, Germany, and E.ON, need gas from Russia,” Heino Hammann, analyst at Germany’s NordLB told Reuters, adding he did not believe the energy sector would be the target of future sanctions.

“E.ON supplies regions that are key to industries, such as oil and gas, engineering, metal production and agricultural chemicals, fulfilling a crucial function in the eyes of the Russian leadership,” said Thomas Deser, senior portfolio manager at Union Investment, E.ON’s eighth-biggest shareholder.

“The company insists that the ties have remained strong in the past, even through difficult times. That’s the main point which is convincing investors,” said Torsten Graf, fund manager at MainFirst and holder of E.ON shares.

A person familiar with the matter told Reuters E.ON was not planning to pull out of Russia or change its business there in any way, and most of E.ON’s 5,000 employees in Russia are locals.

Chief Executive Johannes Teyssen last week, when he said he did not see any risk of expropriation in Russia.

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