Introduction to the Policymaking Process

Li-Chen Sim

Document Type

Book Chapter

Source of Publication

The Rise and Fall of Privatization in the Russian Oil Industry

Publication Date

1-1-2008

Abstract

The transformation of the oil industry is one of the most significant changes that have occurred as part of the transition to a market-based economy in post-Soviet Russia. At the beginning of 1992, there were 300 fully state-owned oil entities ranging from the LUKoi1 business kontsern, production associations, enterprises involved in exploration, refining and distribution as well as research centres.1 Within a decade, six privately owned oil companies emerged to dominate the Russian oil industry, namely, LUKoil, YUKOS, Surgutneftegaz, Sibneft', Tyumen' Oil (TNK) and Slavneft'. They have been ranked among the 50 largest oil companies in the world, and at the end of 2003, they collectively accounted for just over 75% of Russia's total oil output, 70"“80% of oil exports and 60% of the country's proven oil reserves. Comparatively, the remaining three state-owned oil majors "” Rosneft', Tatneft' and Bashneft' "” accounted for only 8% of Russia's annual oil production and 15% of reserves in 2003.2 With the sale of Yuganskneftegaz, a key oil production subsidiary of YUKOS, and that of Sibneft' in December 2004 and September 2005, respectively, the share of oil produced by state-owned companies has since risen to one-third of Russia's total production today. Nevertheless "” and this is an often overlooked point "” two-thirds of Russian oil production remains in the hands of privately owned oil companies.3

Publisher

Palgrave Macmillan UK

Last Page

15

Disciplines

Business

Indexed in Scopus

no

Open Access

no

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