Growth Strategies Case Study

Gazprom: The leading Energy Giant going Global

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Abstract:

Gazprom was the largest Russian company and biggest natural gas extractor with market Capitalisation of US$ 300 billion. The company restructured its business processes to implement vertical integration. Gazprom, headquartered at Moscow, employed 396571 people and was the world’s largest gas company with a 25% of the global gas reserves. In May, 2006, Gazprom had market capitalisation of US$ 300 billion and earned revenues of US$ 50,824.4 millions in 2005. Gazprom’s assets included gas reserves, world’s longest pipeline network with 150,000 km, banking, insurance, media, construction and agriculture. The core activities of the company were gas exploration, production, transportation, processing and marketing. It supplied gas to every region of Russia and exported to more than 25 European countries. The company relied heavily on Western exports and partnerships.

In 2005, Gazprom restructured its gas business to increase profitability, efficiency and scalability of operations. In 2005-06, Gazprom was looking forward for the Central and Eastern European countries along with the Asia and America for the gas markets. The company planned for global expansion to become the world’s biggest gas producer. It focused on the global market especially the European, Asian and American markets. New approaches were devised for the expansion. Gazprom faced challenges of investments and risks with its expansion plans. Would Gazprom be able to succeed with its global plans?

Pedagogical Objectives:

• To understand Gazprom’s strategy to achieve excellence in its business.

Keywords : Oil; Gas; Gazprom; Russia; Growth Strategies Case Study; Globalisation; European Market; American gas market; Asian gas market; Restructuring; Business Strategy; Energy market

Contents : 
Russian Gas Industry
About Gazprom
Gazprom restructuring business
Business strategy
Global Energy Consumption
Regional Gas Markets to Global Competition
Venturing into Global Energy Market
Pipeline to Europe