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April 30, 2022

Andrew Campbell 

After President Vladimir Putin signed a decree at the end of March calling for a special procedure for foreign buyers' fulfillment of obligations to Russian suppliers of natural gas, big gas distributors, Uniper, one of Germany's main buyers of gas from Russia, and OMV, an Austrian oil and gas company, confirmed they were working on ways to keep making payments. Under President Putin's decree 172, "unfriendly" foreign governments must pay in roubles for their gas.

Non-Russian gas buyers must pay in roubles and open special "K" type rouble and foreign currency accounts at Gazprombank, Russia's third largest bank, according to the directive. Gazprombank was established to provide services to Gazprom, the Russian state-owned gas company with a monopoly on gas pipeline exports to Europe.

But Poland and Bulgaria have taken a defiant stance, refusing under any circumstances to sign up to President Putin's favored arrangement. In the midst of political uncertainty created by the Russia's decision to shut off supply to Poland and Bulgaria, European energy corporations are scrambling to find a way to pay for Russian gas without violating EU sanctions.

Firms might rely on EU legal guidance, which stated that sending money to Gazprombank seemed to be possible without violating sanctions. According to other press reports, companies in Hungary and Slovakia, as well as Eni of Italy, were considering opening Russian accounts in order to ensure a steady gas supply from Russia. Nonetheless, European Commission President Ursula von der Leyen has cautioned that complying with Russian requests would breach EU sanctions and put businesses at risk.