WASHINGTON, Jan 5: US energy companies should not be discouraged from investing in Russia in response to Moscow cutting off natural gas supplies to Ukraine, US Energy Secretary Sam Bodman said on Thursday.

Russia on New Year’s Day stopped supplying Ukraine with natural gas after Kiev refused to pay immediately a four-fold increase for the fuel.

Moscow reversed itself the next day after Russia’s European customers complained their gas supplies that flow by pipeline through Ukraine were also affected. Russia and Ukraine later reached a deal on the price for the gas to keep supplies flowing.

Mr Bodman said the dispute had not undermined his confidence that Russia was a good place for US energy companies to invest.

“We continue to encourage our companies to explore opportunities with Russia,” Bodman told reporters.

He pointed out that Russia had a new subsurface law, but the country still had “issues related to the framework under which business will be done in the energy area that still needs to be resolved”.

He said the Bush administration expressed its displeasure with Russia over cutting off the gas supplies.

Mr Bodman said the incident demonstrates the importance of having a wide range of energy suppliers, which European countries are now reviewing as it relates to natural gas.

“We’re hopeful that the Russians will learn from this experience and that they will be even more reliable in the future than they have been in the past as they serve their customers,” Mr Bodman said.—Reuters

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