Out by the door, in through the window: Politics and natural gas regulation in Russia (original) (raw)
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Unnatural monopoly: the endless wait for gas sector reform in Russia
Europe-Asia Studies, 2005
THE NATURAL GAS INDUSTRY is probably the least marketised major sector in Russia. The transitional institutions and structures created in 1992 have proved highly resistant to change, and attempts to increase the role of market forces in the sector have had little success. It is increasingly clear, however, that lack of reform represents a threat to the sector's long-term development and, by extension, to Russia's longterm growth. 1 This article examines the state of the gas industry today, as well as options for reform. The first section describes the structure of the sector and its role in the Russian economy. This is followed by an analysis of the domestic market. These two sections highlight the anomalous position of the vertically integrated gas monopoly OAO Gazprom. Though constituted as a joint-stock company, Gazprom operates in many ways as an arm of the state, combining commercial and regulatory functions, and maintaining tight control over the sector's infrastructure and over information flows within it. Gazprom's control over information is particularly important, as it renders opaque much of what happens in the sector. The third section considers the major sources of pressure for change, chief among which is the need to stimulate investment in gas production in order to sustain output over the long term.
Government and the private energy sector in Russia: a brief review of the literature
International Journal of Teaching and Case Studies, 2018
A symbiotic relationship exists between the Russian state and Russian energy companies that often leads to conflicting institutional relationships between the state and private energy sector. The best example of this complicated relationship between the state and free markets is the case of the Russian energy giant, Gazprom. With the decline in the company's gas production and competitiveness in the Russian gas market, the Russian government may need to restructure Gazprom's relations with independents to prevent it from strategically blocking important projects. Such a scenario calls for a much-needed re-evaluation of the conflicting institutional relationships between the Russian state and Gazprom. This literature review brings together key concepts playing a role in the relationship between Gazprom and the Russian state, effectively laying the foundation for future research to gain deeper insights into the future of one of the world's largest energy companies.
State Capitalism in Time: Russian Natural Gas at the Service of Foreign Policy
Europe-Asia Studies, 2018
This article explores the phenomenon of the enduring state control over the Russian natural gas sector. We suggest that explanations of the underlying motives can be classified under two broad theoretical categories: idealism and utilitarianism. Thus, we argue that state capitalism in the Russian natural gas industry can be understood through the idealistic claims of state power and of serving the national interest, which underpin the dominant perception of natural gas resources as a foreign policy tool. Moreover, we contend that although this perception is often considered as a product of the last decade, in fact it is rooted in history, as a legacy of the Soviet era.
Russia's gas sector: the endless wait for reform?
OECD Working Paper No. 402, 2004
JT00169390 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format ECO/WKP(2004)25 Unclassified English -Or. English ECO/WKP(2004)25 2 ABSTRACT/ RESUME
Russia’s gas “Triopoly”: implications of a changing gas sector structure
Eurasian Geography and Economics
The growth strategies of the two largest so-called independent Russian gas producers-Novatek and Rosneft-as well as developments in international markets and changing domestic energy needs-have put pressure on the present Russian gas sector model dominated by Gazprom. The three companies are involved in a struggle over export liberalization as well as the conditions in the domestic market. An analysis of the resource base of the two Independents indicates that liquefied natural gas (LNG) is top priority for Novatek and that Rosneft's main gas focus is on eastern Russia and Asia, but there is still room for considerable tension with Gazprom. The government is faced with a dilemma, as it both wants to improve Russia's position in export markets and maintain stable domestic supplies, including to socially disadvantaged regions and institutions. Gazprom is insisting that if further access to export markets is granted to the Independents, then they must take greater responsibility for domestic market obligations, while on the other hand the key Independents seem intent on stopping or slowing down their expansion in the domestic market in order to prioritise export sales, and will certainly not take broader domestic supply responsibilities without better access to export markets. The balancing of policies will be difficult since it involves strong players on the Russian economic and political scene, all with ties to the Kremlin.
OECD Economics Department Working Papers, 2004
The gas industry is perhaps Russia's least reformed major sector. Prices are regulated, exports are monopolised and the domestic market is dominated by a state-controlled, vertically integrated monopolist, OAO Gazprom. Gazprom combines commercial and regulatory functions, and maintains tight control over the sector's infrastructure and over information flows within it. The sector as it is currently constituted is highly unlikely to be able to sustain sufficient output growth to satisfy both rising export commitments and domestic demand. There is significant potential for accelerating the growth of non-Gazprom production and making gas supply in Russia more competitive, but this will require fundamental reform. The proposals for reform advanced in the paper address two sets of issues. First, there is an urgent need to increase transparency in the sector and transfer many of the regulatory functions now performed by Gazprom to state bodies. Secondly, there is a longer-term need for a considerable degree of unbundling of Gazprom. In particular, it would be desirable to remove control of the sector's transport infrastructure from the company and to revise the arrangements governing gas exports to non-CIS states, which are currently monopolised by Gazprom. At the same time, recent increases in domestic gas tariffs must continue until internal gas prices rise above full, long-term cost-recovery levels.
Russia's Natural Gas: An Instrument of Foreign Policy
2019
The main focus of this dissertation is the use of natural gas in pursuit of Russia’s foreign policy objectives. Although Russia’s relative power has been considerably limited since the end of the Cold War period, it is argued that Kremlin successfully used its comparative advantage in terms of natural gas, along with the legacy of its soviet infrastructure, from Near Abroad to Western Europe and obtained structural power. As long as Kremlin maintains a high degree of control over production and control over European energy security, the Russian government holds significant leverage. This work is organized three parts. The first one sets a theoretical framework, based on principles of International Political Economy, Strategy, Geopolitics and Russian Foreign Policy. The second part focuses on the very essence of natural gas as a commodity, while comparing it to oil, followed by an analysis of its significance in post-Soviet Russian politics and economics. The Third part focuses is centered on the European Market and more tangible matters of gas disputes. This project was written by me and in my own words, except for quotations from published and unpublished sources which are clearly indicated and acknowledged as such. I am conscious that the incorporation of material from other works or a paraphrase of such material without acknowledgement will be treated as plagiarism, subject to the custom and usage of the subject. The source of any picture, map or other illustration is also indicated, as is the source, published or unpublished, of any material not resulting from my own observation or research. Copyright © Alexandros Sainidis, 2019
The chapter analyses the effects of rent dependence and Putin’s rent redistribution system on small and medium-sized enterprises, ‘the new private sector’ in the Russian economy. The Worldwide Governance Indicators are used to analyse the institutions supporting the market economy and it is argued that when a dominant part of the economy is ruled by the management of oil rents to secure the power of the regime, the role of market-oriented institutions becomes limited. The chapter also analyses the effects of the present restrictions on voice and civil society for institutional development and concludes that there is little hope for ‘reform from below’ of the system.
Russia: Public Debate and the Petroleum Sector
In Russia, civil society engagement with the petroleum sector is surprisingly rich and varied for a country that is ranked low on most democracy-related indicators. This chapter finds that there is a lively and varied public debate, with business associations, research institutes, independent experts, indigenous organizations and the few surviving independent media actively and often competently analysing and commenting on a broad range of issues related to the oil and gas sector. Russians were early users of social media, which occasionally also function as a platform for discussion of petroleum policy issues. However, the real impact of civil society on decision-making and policy formulation in the petroleum sector is not as great as the diversity of actors and discussion might imply. One key reason is the tight government control over mainstream media outlets. The situation for free speech and civil society worsened steadily from around 2004 to 2016. As in neighbouring Kazakhstan, the Russian population puts a high premium on stability over freedom. While a central concern in this book is whether the media and civil society have any influence on the petroleum sector, in Russia the paradoxical situation is that the relationship is often reversed: the gas company Gazprom, rather than another organizational vehicle, is used by the government to control key mass media; and the oil company Yukos played a central role in promoting civil society until its main owner Mikhail Khodorkovskiy was arrested and the company was carved up.