Govenrment and Business Environment Case Study

Gazprom: The Politics of Energy

OR

Abstract:
Russia based Gazprom, globally the largest gas producing company planned to enter into the market of US and China, the two largest energy markets globally. It also plan to strengthen its presence in European market. For a long time the company was the sole gas supplier of Russia, CIS countries and east European countries. But the company’s plan to make an entry in the west European countries raised controversies. US government perceived the move of Gazprom as an initiative of Kremlin to control over US allies through the company. Along with this companies like British Petroleum planned to increase their reach in the targeted markets. Apart from Russia, other energy rich countries of the region, like Belarus, Estonia, Latvia and Lithuania also planned to export gases in Europe and thereby reducing dependence over Russia and Gazprom. These countries tried to build up a separate pipeline to carry gas to European countries, bypassing Russia. Gazprom also started to develop new pipeline network to reach its targeted market. This case deals how gas plays a major role in geo political game, Gazprom’s strategy to expand, how the expansion strategy of Gazprom was perceived and pitfalls in Gazprom’s strategy to expand.

Pedagogical Objectives:

• To understand the business dynamics of natural gas market
• To discuss the business model of Gazprom
• To analyse the geo political environment related to Gazprom’s move.

Keywords : Government and Business Environment Case Study,Gazprom, ENI (Ente Nazionale Idrocarburi), BASF Chemical Corporation, Commonwealth of Independent States (CIS), Orange revolution, British Petroleum (BP), Baltic pipeline, Baku, Sakhalin gas field, European Union (EU), North European gas pipeline, Perestroika, Glasnost, Blue stream pipeline, East bloc countries