The globalisation of Russian energy companies: a way out of the financial crisis?

Abstract

This paper analyses the emergence of global energy companies in Russia. Within the framework of the history and rules of privatisation, the unfavourable investment climate, and the distortions of the internal Russian market, a dual structure of the Russian energy sector developed. Economic survival at present is strongly linked with internationalisation of business activities for one group of companies, while the second group of companies remains trapped in restructuring of assets and loans and reorganisation of ownership. The members of the first group are on their way to becoming Western style energy companies with strategies similar to those of their international counterparts. Case study evidence is provided on Lukoil, Gazprom and the power industry. The success of Russian global energy companies will have consequences for international competition, particularly in Eastern Europe and Russia.