Gazprom’s Vertical Ambitions … At Home and Abroad?

The International Herald Tribune speculated about Gazprom’s vertical ambitions in a short note today. According to the report,

“….Gazprom, which is controlled by the Russian government, wants to buy a major stake in Mosenergo, Moscow’s main energy supplier. In the short term, this might not affect consumers too much. They may even benefit, if Gazprom can streamline gas delivery and generation, or if Gazprom decides to cut prices to shut down its competitors. In the long term, though, I’m betting that Gazprom will try to dominate – if not monopolize – the market in Moscow and in other major cities…”

Perhaps more interesting, though, is what this could foreshadow for Gazprom’s international plans. Would these changes encourage Gazprom to make similar inroads in other countries, perhaps former Soviet bloc nations outside the European Union where competition rules aren’t too strict? And as Gazprom further strengthens, it will almost certainly become a more aggressive bidder for energy from sources outside of Russia as well. Additionally, as IHT mentions, it may also try to gain control of more pipelines, allowing it to control distribution in countries where it can’t dominate the retail market.

This entry was posted on Thursday, September 13th, 2007 at 6:33 am and is filed under Gazprom, Russia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

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