Gazprom - Naftogaz Ukrainy Dispute: Business or Politics?


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BENV003 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

International Business
Case Length : 15 Pages
Period : 1991 - 2006
Pub Date : 2006
Teaching Note : Not Available
Organization : Gazprom, Naftogaz
Industry : Energy
Countries : Europe, Russia

Abstract:

The case focuses on the dispute between the state controlled companies of the Russian Federation and Ukraine - Gazprom and Naftogaz, respectively. The case discusses in detail the evolution of Gazprom as a company and the growth of its exports to Europe. It then focuses on the disputes it had with Ukraine after the disintegration of the Soviet Union. It elaborates the impact of elections in Ukraine on the subsequent dispute that led to the cut off of gas supplies. It shows the problems of transition of an economy from state controlled subsidized system to market oriented and market determined system. It also looks at the political aspect of the case. The case also highlights the vulnerability of third parties in a dispute.

Issues:

Recognize the problems of a comparatively smaller nation trying to break free from the influence of its dominant neighbor

Understand the impact of subsidizing domestic energy consumption on its economy, especially when gas and oil are imported

Realize the dependence of the European countries on gas imports from Russia

Appreciate how a company's exports become vulnerable when its exports are routed through third parties and its efforts to gain control over such transitory routes

Contents:

  Page No.
Introduction 1
Background 2
Disputes with Ukraine 3
Elections in Ukraine 6
Turn of Events 7
Political Aspect 8
Outlook 9
Exhibits 11

Keywords:

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