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Russian Rivalries: A Tale of Two Energy Firms

Sep 7, 2017 | 12:26 GMT
Russian President Vladimir Putin meets with Igor Sechin, the CEO of oil giant Rosneft, on May 17, 2017.

Russian President Vladimir Putin meets with Igor Sechin, the CEO of oil giant Rosneft, on May 17, 2017.

(YURI KADOBNOV/AFP/Getty Images)

Gazprom has long been the Kremlin's favored energy partner, holding a monopoly over Russia's piped natural gas exports. Gazprom's stranglehold on natural gas exports meant the Kremlin could use it as a tool in its relationships with former Soviet states, Europe and Turkey. But lower global natural gas prices, as well as a string of diversification projects in Europe, Eurasia and the Middle East, have curbed Gazprom's ability to influence affairs in those regions, which in turn has weakened its position with the Kremlin. In Gazprom's struggles, Rosneft has spied an opportunity. Now that its rival is weaker, the firm has started to aggressively grab new assets: In October 2016, Rosneft closed a deal to take over the country's sixth largest oil firm, Bashneft, even after Putin explicitly warned against the takeover with a rare public threat. Rosneft won out in the end, agreeing to let the Kremlin privatize a large...

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