Gazprom's internationalization strategies

With a view to integrating the country into the global economy, Russia's largest, still majority state-owned company, Gazprom, is implementing a three-pronged internationalization strategy, with V. Putin asserting his determination to use the 'weapon of gas', and hydrocarbons more generally, to enable Russia to regain its status as a great power. Firstly, Gazprom is seeking to diversify its export markets by gaining a foothold in the United States and Asia, while consolidating its position in the European Union, which remains its most important market, notably through the opening of new routes. Secondly, over the last ten years or so, the gas monopoly has been acquiring stakes in a number of major gas transport and distribution companies, and even in power plants, in the EU, the former USSR and the former CEMAC countries. Its aim is not only to consolidate and secure its position, but also to recoup part of the gas rent by gaining direct access to end consumers. Finally, it is imperative for Gazprom to broaden the base of its reserves, which today are mainly located in Russia; hence the numerous production-sharing agreements concluded with Central Asian gas-owning states. However, a number of factors, both external and internal, are likely to hamper Gazprom's plans. Thus, the liberalization of the European energy market, by opening the door to competition, may undermine the competitiveness of its offer, even though its production costs are likely to increase due to the depletion of its most accessible reserves. In this respect, the company does not seem ready to make very heavy investments in the development of new deposits, all located in increasingly remote and inhospitable regions, and could envisage slower production growth in order to 'save' its reserves. But there remains the unknown factor of the trade-off between supplying the domestic market and exporting, which depends on domestic prices, and is therefore an eminently political decision