Question by Ivan: Why does Russia not have more competition in its oil and gas industry?
The industry is dominated by state-run Gazprom. Is this because it takes so much money to run an oil/gas company that several small companies would be unfeasible? But what are the risks of such a monopoly, both for Russia and European countries who rely on Russian gas and oil?
Answers and Views:
Answer by GARISH
Actually I heard there is one more gas company in Russia, but anyway only Gazprom allowed to export gas.
It is not in the Russian interest to reduce export prices.
It is Russia’s profit.
Also yes even Gazprom sometimes does not have a lot of money to start work on new gas deposit. So this is the reason too.
And it is only about gas.
As about oil there are probably around 10 companies and gazprom is not the leader.
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Just did it! says
transportation of gas (via pipelines) is a natural monopoly in the sense that it would be inefficient to have more than one firm.
Since you need access to transportation to produce or export gas, Gazprom essentially controls both production and exports, and chooses not to let any other firms in. Which is not surprizing since Gazprom was created by re-labelling Gas Ministry of Soviet Union.
The oil industry is more decentralized for some reason. Transportation is monopolized by Transneft, but there are privately owned producers (TNK, Lukoil, etc.)