Mixing Oil, Gas, and Politics

The Russian government has become a majority shareholder in Gazprom, one of the country's largest oil producers. The buyout is aimed at opening the company up to foreign investment and bolstering the Russian stock market. The move was also likely designed to put the government in a more favorable position to purchase large blocks of other oil companies, with the goal of creating an enormous, state-owned monopoly on oil production. Foreign investors, despite benefiting initially from the deal, are likely to be more shut out of ownership of the Russian oil sector in the future. Gazprom's business activities are notoriously suspect and inefficient. Furthermore, although Russia is the world's largest non-OPEC energy exporter, state ownership has ground production down to a slow pace. With the Gazprom deal, the Russian government has positioned itself to become the principal beneficiary of their country's petroleum riches, at the expense of those waiting to cash in on the global market. – YaleGlobal