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Russian Energy Markets 2
Russian Energy Markets 2
Russian Energy Markets 2
OF RUSSIA
INTRODUCTION
Russia, one of the world's two energy superpowers, is rich in natural energy
resources. It has the largest known natural gas reserves of any state on earth,
along with the second largest coal reserves, and the eighth largest oil reserves.
Russia is the world's fourth largest electricity producer after the USA, China,
and Japan.
Russia exports 70% of oil produced, making it the world's leading net energy
exporter as well as a major supplier to the European Union.
GAS In recent years Russia has identified the gas sector as being of key
strategic importance. The share of natural gas as a primary energy source is
remarkably high compared to the rest of world. Russia has the world biggest
natural gas reserves, mainly owned and operated by the Russian
monopoly Gazprom, which produces 94% of Russia's natural gas production.
OIL Russia is the largest oil producer in the non-OPEC countries, and second
biggest in the world after Saudi Arabia. The biggest Russian oil company is
Rosneft followed by Lukoil, TNK-BP, Surgutneftegaz, Gazpromneft and Tatneft.
All oil trunk pipelines (except the one) are owned and operated by the stateowned monopoly Transneft; oil products pipelines are owned and operated by its
subsidiary Transnefteproduct.
COAL Russia has the worlds second largest coal reserves, with 157 billion
tonnes of reserves.
ELECTRICITY PRODUCTION Russia is the world's fourth largest electricity
producer after the USA, China, and Japan. Roughly 63% of Russia's electricity is
GAZPROM.
THE VIEW FROM INSIDE
WHAT IS GAZPROM?
OAO Gazprom (English - Open Joint Stock
Comlany Gazprom) is the largest extractor
of natural gas in the world and the
largest Russian company.
Gazprom is unique for enjoying the advantage
of being simultaneously an energy producer
and supplier owning a potent resource base
and a manifold gas transport infrastructure.
Due to Russia's geographical location, the
Company has the potential to become
an energy bridge between the European and
Asian markets by supplying its own natural gas
and providing gas transit services for other
producers.
A BIT OF HISTORY
The history of big gas in the Soviet Union began in 1946
upon commissioning of the Saratov Moscow gas trunkline.
Large natural gas reserves discovered in Siberia and
the Ural and Volga regions in the 1970s and 1980s enabled
the Soviet Union to become a major gas producer. Gas
exploration, development, and distribution were centralized
in the Ministry of Gas Industry, which was created in 1965.
Under the leadership of the Minister of Gas Industry Victor
Chernomyrdin, the ministry transformed itself into State Gas
Concern Gazprom, which became the country's first statecorporate enterprise. The company was still controlled by the
state, but now the control was exercised through shares of
stock, 100% of which were owned by the state
In 1993 the Concern laid the foundation for setting
up Gazprom Russian Joint Stock Company, which was
renamed in 1998 as Gazprom Open Joint Stock Company.
PROCESS OF PRIVATIZATION
In 1992 the organization became a jount-stock company and started to
distribute shares under the voucher method: every Russian citizen received
vouchers to purchase shares of formerly state-owned companies.
By 1994, 33% of the Gazprom's shares had been bought by 747,000 members
of the public, mostly in exchange for the vouchers. 15% of the stock was also
purchased and allocated to Gazprom employees. The state retained 40% of the
shares, but the amount was gradually lowered to 38%. Anyway the Russian
government has still had a control under the company till now.
Trading of Gazprom's shares was heavily regulated, and the by-laws of the
company prohibited foreigners from owning more than 9 percent of the shares.
Sales volume
56,2
Belarus
21,1
Kazakhstan
9,6
Lithuania
2,8
Moldova
2,7
Armenia
2,1
Latvia
0,7
Georgia
0,7
Estonia
0,6