Could an Austrian oil and gas group with more than 41,000 employees, some 25.5 billion euros turnover and a presence in more than 20 countries actually be a secret front for Russian gas giants, extending their tentacles of power into Europe?

It could be if you believe Zsolt Hernadi, the chairman of Hungarian rival MOL, not to mention some scary headlines about Russian gas in the British press.

Earlier this week Austria’s OMV sold a 21 percent stake it held in MOL to Russian oil group Surgutneftegaz for 1.4 billion euros ($1.9 billion), double the amount the stake was worth as stock. The stake was originally bought from … a Russian family Almost half of the stake was originally bought from … a Russian family.

“Suspicion arises … that because the Russian investor bought this stake at exactly the (initial purchase) price, it (OMV) was just a front,” Hernadi told a Hungarian parliament committee.

The sale came just days after OMV’s chief executive said he did not plan to let go of the stake this year, fuelling speculation there was an ulterior motive behind the swift deal, finalised in the middle of the night on Sunday.

“Sometimes the markets offer opportunities you have to take,” OMV’s spokesman said. The sale also came after a miserable takeover attempt by OMV, which was repelled by the Hungarian group at every twist and turn.

The European Commission warned on the deal last year, saying it could create big competition problems and lead to higher prices. OMV eventually withdrew its $23 billion bid. Unofficial talk among EU officials has also highlighted worries about OMV’s Russian connections.

But doesn’t selling the stake just make good business sense? And if OMV is a Russian lapdog, why is it spearheading a consortium for the Nabucco pipeline, a project aimed at diversifying European supplies of gas away from Russia?

Well, Russia’s hold on energy supplies is an ever-sensitive issue. A spat with Ukraine over payments escalated into a two-week supply shutdown earlier this year, hitting parts of Europe and underlining reliance on Russian gas.

So Russia and OMV-bashing gets some sympathetic ears, even if MOL’s Hernadi said in 2007 that his company would be better off in the hands of the Russian firms than OMV.

Russia, for its part, may not have been keen to see a consumer of its oil fall into hostile hands.

Surgut, believed to have around $19 billion sitting on its balance sheet as of September 2008, could probably afford to pay a healthy premium. Investors, who have begged the company for years to put its cash in play, rewarded it with a rise in its stock price.

OMV has been doing business with Russia’s Gazprom since 1968, describing the oil giant as a “reliable partner” even during the last gas row.

It has to toe a fine line. While it relies heavily on Russia for some of its big contracts and for developing a major gas hub, it is also keen to push the Nabucco project, emphasising all the while that the plans are not politicised and certainly not anti-Russian.

Nabucco’s managing director told me late last year that the consortium does not worry about where gas comes from, as long as the sources are diverse - Iran, even Russia, are possibilities, it is about pragmatism, not politics, he said.

Most analysts think of the MOL stake sale as purely pragmatic too, ignoring the politically-charged comments from Budapest. “The price is favourable as OMV has achieved close to a 100 percent premium to MOL’s share price at the close on Friday,” UBS analysts wrote in a research note. “The deal eases liquidity worries at OMV.”

But whether OMV is just pragmatic or secretly a Russian puppet, this is unlikely to be the last time it gets drawn into the politics of energy.

The difference between Europe having Russian gas as normal and not having it came down, in the end, to three words. They were hand-written next to what looks like the signature of Ukraine’s Deputy Prime Minister Hryhory Nemyrya and they were: “With declaration attached”.

That was enough to undercut a deal hammered out by Czech Prime Minister Mirek Topolanek, whose country holds the rotating EU Presidency, to deploy monitors along the gas pipeline route — Russia’s condition for turning the taps back on.

The declaration that Nemyrya referred to set out Ukraine’s position in a dispute with Moscow over gas prices. It said, among other things, that Ukraine has no outstanding debts to Russia, an assertion with which Moscow strongly disagrees. Russia said the addition of the three words made the monitoring agreement null and void. Deal off.

Which was a shame, because the two sides came tantalisingly close to turning the gas back on.
A few hours earlier, a team of European Union monitors had arrived by bus at the Sudzha gas compressor station in western Russia. They were all set to supervise the resumption of gas flows. They even had a party of journalists in tow to witness the big moment.

In the event, the monitors ate some food, had a tour of the site, and then left for the nearby town of Kursk, presumably to find a hotel for the night. The journalists were loaded onto a bus and driven back to the Ukrainian border where they had come from. For the EU officials trying to get the gas turned back on, it was back to the drawing board. And for people in the worst affected countries in Europe, it meant more days worrying about an energy crisis in mid-winter. 

So whose fault was it? Maybe Topolanek should have stopped Nemyrya inserting those three little words. It’s worth asking if these problems would have arisen if the row happened two weeks earlier, when Nicolas Sarkozy still held the EU presidency on behalf of France. Maybe Ukraine should not have tried to amend the agreement by the back door. Maybe Russia should have held its nose and found a way to work around those three words if that was what it took to restore gas flows quickly. Whatever the answer, the episode makes one thing clear: there is total mistrust between the governments of Russia and Ukraine.

The deal could still be resurrected. Russian gas export monopoly Gazprom said early on Monday Ukraine had signed a new version of the agreement, without the conditions. A Russian delegation was on its way to Brussels, possibly to add their signatures to the new version. But even once the deal is done and the gas is flowing again to Europe, the row at the centre of all this, over how much Ukraine should pay for its gas, will still be there. And with so little trust between Moscow and Kiev, as illustrated by the saga of the three little words, that leaves vast potential for new flare-ups.

Britain’s Prince Andrew stepped into Central Asia energy diplomacy this week, touring the vast former Soviet region and holding top-level talks on gas supplies in remote Turkmenistan.

Western envoys have flocked to Central Asia over past years, hoping to grab a share of its abundant energy reserves - a worrisome trend for Russia which sees the mainly Muslim region as part of its traditional sphere of interest.

Turkmenistan, a long-isolated Caspian nation, has been of particular interest since its new president came to power in 2006 promising to open its doors to foreign investors.

Prince Andrew - who doubles as Britain’s special representative for international trade and investment - sat down for talks with President Kurbanguly Berdymukhamedov to discuss expanding energy supplies to Europe.

Although little came out of the closed-door meeting, his visit symbolised growing Western interest in forging closer energy relations with Central Asia’s biggest gas exporter.

“The president expressed readiness to look into any proposals with this regard (expanding gas shipments) and noted that the energy potential of the country can allow for virtually any volumes of gas shipments,” the state news agency Turkmen Khabarlary reported.

But Turkmenistan’s ambitions to diversify shipments away from Russia remain under question as Moscow still controls, as in Soviet times, its gas export network. Turkmenistan says its reserves exceed 20 trillion cubic metres — way above the 2.9 tcm estimated by BP.

He was a suave central banker and she a “gas princess”, a young politician desperate to make her mark. In 1998 Yulia  Tymoshenko, now Ukraine’s prime minister, said she knew her destiny lay with Viktor Yushchenko, who went on to become president.

“We understood that we are a team,” she said at that time.

It’s an assertion Yushchenko disputes — a clash of views that has defined this partnership since they overturned a Soviet-style leadership in the 2004 “Orange Revolution” and vowed a modern, Western future for Ukraine’s 47 million people.

Then they stood shoulder-to-shoulder — her revolutionary speeches firing up crowd after crowd, his more academic approach comforting those who feared she was reckless in her pursuit of power.

Now barely on speaking terms, their bickering over policy and outlook could force the former Soviet republic into the third parliamentary election in as many years.

But was their partnership only ever a marriage of convenience?

In 1999, the tough former businesswoman, dubbed the gas princess because of her success in the cut-throat world of post-Soviet energy dealings, became deputy prime minister for energy in Yushchenko’s government. She was dropped in 2001 and former President Leonid Kuchma launched a corruption case against her.

Some Ukrainian media say it was Yushchenko, fearful for his political future, who agreed to let her go, opening the way for corruption charges she says were fabricated by Kuchma.

Since then, many think the pair’s jealousies and mistrust of each other have made them squander the chance to steady Ukraine on a path towards Western integration and reform.

She lasted less than a year as Yushchenko’s first prime minister, sacked after they fell out over policy, particularly her calls for a broad review of 1990s privatisations.

Now sporting her trademark peasant braid, she is back as prime minister. Many analysts say Yushchenko is desperate to challenge her lead in the opinion polls, which suggest she would win a presidential election and gain seats in any vote for parliament.

Accusing her of dangerous populism that threatens to wreck the economy, Yushchenko has come out fighting. His office has accused her of being a traitor for not openly supporting Georgia after its brief war with Russia over South Ossetia.

He says she has driven the economy to the brink, with inflation reaching a record 30 percent earlier this year. His office says she is selling Ukraine out to the Russians to ensure Moscow’s support for the election.

But she denies all charges and is trying to convince her doubters that she can be pragmatic.

She has called for Yushchenko’s Our Ukraine party to return to the ruling coalition after he said the government had collapsed — a departure from her usual fiery stance which is bound to antagonise Yushchenko even further.

This battle of wills looks set to run.