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When is a break-up of Gazprom good for Russia?

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  • Tsygankova, Marina

Abstract

In the late 1990s, several proposals for a structural reform that would bring competition and market prices to the Russian gas industry were intensely debated. Splitting up Russian gas monopolist Gazprom into several producing companies was a considered option. In this paper, I examine theoretically and numerically how a split-up of Gazprom would affect Russian national welfare. Results show that under the current gas market structures in Europe and Russia, the split-up of Gazprom's monopoly might not be beneficial for Russia. However, analysis in the paper indicates that the market shares that Gazprom has in both Russian domestic and European gas markets are important in determining whether Gazprom's dominance is supported under the national welfare criteria. When Gazprom has small market share in Europe and large market share in Russia, a break-up of Gazprom might plausibly result in increase of Russian national welfare.

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  • Tsygankova, Marina, 2010. "When is a break-up of Gazprom good for Russia?," Energy Economics, Elsevier, vol. 32(4), pages 908-917, July.
    • Handle: RePEc:eee:eneeco:v:32:y:2010:i:4:p:908-917
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    Cited by:

    1. Kristine Grimsrud, Knut Einar Rosendahl, Halvor B. Storrøsten, and Marina Tsygankova, 2016. "Short Run Effects of Bleaker Prospects for Oligopolistic Producers of a Non-renewable Resource," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Finn Roar Aune, Rolf Golombek , Arild Moe, Knut Einar Rosendahl and Hilde Hallre Le Tissier, 2015. "Liberalizing Russian Gas Markets - An Economic Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Adelman S).
    3. Gabriel, S.A. & Rosendahl, K.E. & Egging, Ruud & Avetisyan, H.G. & Siddiqui, S., 2012. "Cartelization in gas markets: Studying the potential for a “Gas OPEC”," Energy Economics, Elsevier, vol. 34(1), pages 137-152.
    4. Orlov, Anton, 2016. "Effects of higher domestic gas prices in Russia on the European gas market: A game theoretical Hotelling model," Applied Energy, Elsevier, vol. 164(C), pages 188-199.
    5. Christophe Heyndrickx & Victoria Alexeeva-Taleebi & Natalia Tourdyeva, 2014. "To raise or not to raise: Impact assessment of Russia's gas price reform," ERSA conference papers ersa14p1535, European Regional Science Association.
    6. Orlov, Anton, 2015. "An assessment of optimal gas pricing in Russia: A CGE approach," Energy Economics, Elsevier, vol. 49(C), pages 492-506.
    7. Heyndrickx, Christophe & Alexeeva-Talebi, Victoria & Tourdyeva, Natalia, 2012. "To raise or not to raise? Impact assessment of Russia's incremental gas price reform," ZEW Discussion Papers 12-052, ZEW - Leibniz Centre for European Economic Research.
    8. Tsygankova, Marina, 2012. "An evaluation of alternative scenarios for the Gazprom monopoly of Russian gas exports," Energy Economics, Elsevier, vol. 34(1), pages 153-161.

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