The rise of the CIS energy champion
While the Gazprom-Rosneft merger will make FDI in Russia easier, Ukraine's attempt to keep the retail petrol market competitive is on hold.
The past month has seen two efforts to create CIS national oil and gas champions. Where Russia succeeded, Ukraine failed.
The success is the merger of Gazprom and Rosneft. It consolidates most of the state's oil and gas holdings, with the exception of its stake in LUKoil, into a single company managed by a single person – Gazprom CEO Alexei Miller. This will help it to manage its energy policy and engage with multinationals such as TNK-BP, Exxon-Mobil and Chevron-Texaco, as other CIS countries have done.
Kazakhstan began the merger of Kazakh Oil and TransNefteGaz in 2002, to create an efficient state-owned energy company capable of competing and cooperating with the super-majors active in the country. Kazakhstan felt it had not fully served its own interests in deals struck with super-majors in the early 1990s.
Russia wants to follow suit. Prime minister Mikhail Fradkov, speaking in Astana last month, said: “Combining the [state's] oil and gas assets is needed to improve competitiveness on foreign markets.” The enlarged Gazprom “would be turned into a trans-national company of world significance”.
The move has raised some concerns that the government is tightening its grip on the commanding heights of the economy.