Gazprom Assignment Example | Topics and Well Written Essays - 2000 words

Gazprom - Assignment Example By 2002, the government held about 38.37% of share of Gazprom. In the global extent, the organisation represents about 20% of international gas production. In Russia, the organisation regulates about 60% of gas services and generates about 50% of power in the nation. Gazprom is liable for a supporting considerable portion of Gross Domestic Product (GDP) in Russia and delivers about 20% of its revenue to the national budget (Thomas, 2006). However, presently the dominance of Gazprom is under stake and the organisation is also facing challenges in order to stay sustainable in business. 1.1 Terms of Reference Focusing on this aspect, the report is based on the analysis of Gazprom. The objective of the report is to discuss the socio-political issue which is faced by Gazprom in the oil and gas industry. In line with the issues faced by Gazprom, the report also undertakes a SWOT analysis of the organisation. ... In the year 2006, a disagreement emerged between Russia and Ukraine which resulted in cessation of deliveries of natural gas from Russia to Ukraine. Since most of Russia’s gas for Western Europe transports through Ukraine, the disagreement between these two nations resulted in significant reductions in sales of Gazprom to the Western Europe, particularly during the period of high demand for example during cold weather. During similar period, other socio-political problems resulted in reduction of supply of natural gas to America, Georgia and Moldova, bringing about serious issues to fulfil the demand of customers as well as to enhance the profitability (Perovic & et. al., 2006). Gazprom is a unique organisation, because it was basically a department which has become a corporation. Furthermore, it is also highly contentious to understand the level to which Gazprom represents the government and business interests. Gazprom’s mainstream business is export of natural gas whi ch has reduced due to over pricing activities. The subsidiaries of the organisation are being lopped off and sold at increased prices to more active competitors. The dramatic decline of the organisation’s sales is sparked by rapid improvement of American gas supply companies, failure of Gazprom to invest in research and development activities and ignorance of transformation in oil and gas industry. The problems of Gazprom most probably accelerate the difficulty of long run sustainability, where the government has failed to react to the prevailing market situations (Englund & Lally, 2012). 3.2 European Gas Market The gas market of Europe has stagnated because of high prices. Thus, natural gas provided by