What should be done to promote competition in oil and gas sector of Russia?

24 october 2014

Head of the Department for Strategic Studies in Energy Alexander Kurdin took part in roundtable “Russian oil and gas sector competition development prospects: market mechanisms and policy drivers” within National Oil and Gas Forum.

Experts discussed state policy effectiveness, industrial regulation scale, effective tools implementation, which will replace heavy regulations with current market mechanisms. Promotion of competition in oil and gas sector is an effective motivation for innovations, cost improvement, efficiency upgrading, key element of quality economic growth, experts pointed out. Decline of excessive state presence, wise antimonopoly policy, backing of energy SME’s – these are few basic conditions, which promote set-up of competition and SMEs development in the oil and gas sector, according to experts.

“As we go forward, we are to develop both oil and gas branches”, said Mr. Kurdin. “We should figure out what is necessary: more active competition development, including the one between our various outer markets energy suppliers, or some coordination of their actions. What we should do in our internal markets, if the existing level of competition is enough, or we should make follow-up moves”.

Effectiveness decrease in the branch can be monitored, which is associated with bad corporate management, almost passive companies’ cost improvement. “One of the reasons is russian oil and gas branches’ weak competition development rate, I believe”, announced Mr. Kurdin. “There is progress in these fields. We see efforts made by the Federal Antimonopoly Service. However, there are obstacles, e.g. problems with access to pipeline transportation system, limitation of gas export capabilities, regional imbalance. There are some bottlenecks which prevent harmonious competition development”.

The Analytical Center was program partner of National Oil and Gas Forum, which took place in Moscow on October 22-24.