Politics and outdated perspectives hurt business.

Gazprom to Stick to Britain’s Model in U.S.

Russia’s gas monopoly Gazprom is in talks with holders of a few gas traders in the United States about the buyout of the majority stakes from them. The monopoly applies the same methods to pave the way to Britain’s market of gas retail, which has been thoroughly protected against its expansion. Gazprom has covered 1.5 percent of it, stepping up the supplies from 2 percent to 8 percent in the last six years.

The company is studying chances for the first acquisition in the United States, Vitaly Vasiliev, who is the CEO at Britain’s subsidiary of Gazprom, Gazprom Marketing & Trading (GMT), made clear it very clear. The project could start from scratch, or via the partnership or through the acquisition, Gazprom will make the final decision by this year-end, the official specified.

The monopoly is eyeing stakes in traders, but the final agreements haven’t been attained yet. The negotiator is the U.S. division of GMT, GMT USA, which office opened in Texas in 2006.

Russians are trying to build the capability for Gazprom to place its volumes in the market in the most profitable way, to gain the value that Gazprom lost by simply selling at the border or to somebody in the middle. And the promotion experience of the top managers are inspiring. Vasiliev took over GMT in 2002, when Gazprom covered around 2 percent of Britain’s market. Since then, however, the monopoly has extended to above 8 percent on wholesale gas market and reached 1.5 percent on retail market. The progress appears even more impressive given the general antagonism of Britain’s authorities to Gazprom.

On the other hand some financial analyst expressing that fear by US and UK governments might actually make it impossibly for Gazprom to gain more than 10%, which in other words investments for increase of market share might be in vain. Therefore analysts proposing for Gazprom to invest into gas and oil rich Central Asia or try to extend its pipeline monopoly.

Entry # 12, 20600793