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Russias Natural Gas Industry Structure
- By Oil and Gas Author
- Published 09/1/2006
- Crude Oil Petroleum , Natural Gas Petroleum , Exploration and Discoveries , Liquefied Natural Gas LNG , Oil Field Development , Environment and Pollution , Petroleum Pipeline
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View all articles by Oil and Gas AuthorThe government hopes that the removal of the ring-fence, which limits foreign share ownership in the company, will finally allow Gazprom to raise much-needed investment capital. The consequences of a flawed reform package are serious. First, Gazprom provides subsidized gas to UES (Russias electricity monopoly), meaning that price increases as part of a deregulation program could make gas unaffordable for the Russian populace—one-fifth of whom are below the poverty line. Also, the government receives 25 percent of its tax revenue from Gazprom, and breaking the company up could lead to similar problems in revenue collection seen in the Oil sector. Finally, the creation of a deregulated gas sector, run by much wealthier individuals would inevitably further reduce the Kremlins political control in the industry.
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Russias Natural Gas Industry Structure
