Last month Naftogaz celebrated a big victory in a lawsuit against Gazprom. However, its domestic battles have been far less victorious. One major stumbling point is the system of gas supplies dominated by oligarch Dmitry Firtash. Despite international pressure, and the obvious economic benefits of unbundling the system of gas supply and distribution, the government has been reluctant to challenge Firtash’s monopoly. Shadow Governance Intel analyses the standoff between Naftogaz and the Firtash-controlled regional gas suppliers, and explains why the government continues to resist change.
The scandal around Cambridge Analytica (more specifically, its dealings with LUKOIL) has demonstrated that it is not only state-owned companies that the Kremlin uses for political purposes. Large private companies in Russia face an interesting conundrum: although they need well-connected shareholders to ensure stability and compensate for institutional weakness, these very shareholders often present commercial, investment and reputational risks.
Despite the progress made by Ukraine towards the liberalisation of the gas market, its reform efforts have been marred by the political headwinds and interference of powerful elite networks. Overcoming this inertia will determine Ukraine’s future financial prosperity; however, the window of opportunity is closing. The break-up of Naftogaz is a very undesirable thing from the perspective of key stakeholders, in the sense that it would create significant competition in the marketplace – a market they have controlled both in terms of production and marketing.
China's recently published Arctic policy places great emphasis on the development of the Polar Silk Road, which will require further expansion of its cooperation with Russia. Shadow Governance looks beyond the geopolitical layer of the China-Russia partnership in the Arctic, and analyses its commercial implications and its impact on Russian elite dynamics.
This is Part II of a two-part series reviewing Russia's recent green energy boost as an emerging investment opportunity. In today's analysis, we look at the key corporate players involved in the nascent renewable energy market, assess its investment potential, and forecast if the trend of green energy is likely to last in Russia.
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This is Part I of a two-part series looking at Russia's recent green energy boost as an emerging investment opportunity. An evolving economic and international context has pushed the Russian authorities into paying attention to the country's green energy potential. In part I, we examine the country's renewable energy capacity and existing support programmes for prospective investors.
During the economic recession, the Kremlin suggested that private players would need to secure their own financing to advance its energy ambitions in the Arctic. This might result in renewed corporate disputes, as state-owned monopolists of the Arctic shelf are determined to retain control over the hydrocarbon reserves of the Russian High North.
There is a shake-up of power players in Kazakhstan’s nuclear sector. In the midst of waning Russian influence, and growing Chinese interests, the political elite group known as the Southerners have been given another opportunity to expand their footprint in the country’s political and commercial echelons of influence. Nuclear sector dynamics are thus simultaneously highlighting Astana’s geopolitical and political realignments.
The legal battle between Rosneft-Sistema over Bashneft is one of the largest lawsuits involving Russian energy companies since the Yukos case, which also involved illegal privatisation and the arrest of senior officials. Rightly so, investors are worried that this case will have significant repercussions for the investment environment.
Historically, the use of bribery, rent-seeking, and opaque intermediaries was so entrenched in Ukraine's gas sector that they are essentially the lubricants that run the industry. Has anything changed?