Russia's President Vladimir Putin has signalled a tough fight with the European Union EU over oncoming talks about a future energy deal.

Russia’s President Vladimir Putin has signalled a tough fight with the European Union EU over oncoming talks about a future energy deal, as the European Commission has mapped out the key elements it would like to see in place. The developments have come as December 1 negotiations approach on renewing the existing EU-Russia Partnership and Cooperation Agreement, which is to be replaced with a new deal, maybe called a Strategic Partnership Agreement.

Speaking after an informal EU heads of government summit at Lahti, Finland, to which he had been invited, Putin stressed that the agreement would not involve Russia accepting the terms of the 1991 multilateral Energy Charter Treaty, agreed by Boris Yeltsin in 1991, which would see EU firms breaking Gazprom‚s monopoly on Russian and Central Asian gas supplies and accessing Russia energy networks.

He said: “We are not against the principles laid down in the Energy Charter but we believe that certain provisions need to be further specified, or a different document needs to be developed”, claiming a charter-based deal “cannot be solid”.

Indeed, the Russian president would not even confirm whether the newagreement would have a chapter on energy. He said: “We don’t know if it’s going to be a separate document. It’s too premature to discuss it”.

However, he was at least optimistic that agreement could be struck. “… in the field of energ … We believe that, even with respect to those matters which are the subject of dispute today, we will reach accord.”

The meeting followed the release of a European Commission Communication‚ (policy paper) on EU energy relations with non-EU countries. It underlined what it sees as the ace in the EU’s hand – cash – for investment in the Russian energy sector. It said: “With the current levels of investment in production, transport and distribution of energy products, concerns have been expressed that Russia may not be able adequately to satisfy the growing demand on both its export and domestic markets.” As a result, Brussels said it was prepared to participate in “a strong joint effort to improve the energy efficiency of the Russian economy”, but for this to be possible, legal “conditions regulating and fostering energy trade and cross investments between the EU and Russia would be required.”

The paper fleshes out the possible bones of a deal:

*Russia gets a stronger direct presence in the EU market in electricity and gas suppliers via commercial buy-outs, it also gets long-term gas supply contracts, and is offered the integration of its power grids with those in the EU along with free trade for electricity and nuclear material sales.

*The EU gets “non-discriminatory and fair treatment from Russia in their energy relationship”. This would be across the board: regarding Russian energy supplies; access to the Russian market for EU investors, including acquisitions; third party access to pipelines within Russia, including for carrying gas and oil from the Caspian Sea and Central Asia; respect for competition rules, plus high levels of environmental security and safety.