By Tim Seymour
Gazprom (OTCPK:OGZPY), the giant state-run gas producer, has gotten marching orders from no less than Putin himself to open its pipelines to independent rivals ... or else.
Putin warned OGZPY.PK that he will work toward eliminating the company’s monopoly status — nominally granted due to its strategic position in the Russian economy — unless it agrees to share access to its distribution network.
The context here is that OGZPY.PK has been finding it difficult to maintain regular supply to Europe and other key Russian gas customers. In order to regularize the country’s output, Putin is now insisting that other domestic gas producers — who have never been able to count on Gazprom’s infrastructure — are allowed in to pick up the slack.
Novatek is the obvious beneficiary but they have not really had any problems here and are not looking to export directly.
Arguably the biggest beneficiary that U.S. investors can trade is Lukoil (OTCPK:LUKOY), which has significant reserves.
The sleeper here may be very thinly traded Surgut (OTCPK:SGTZY), which is also friendly with the Kremlin, produces significant gas, and needed a step toward unlocking value there.
Either way, the politics of this order tell you that the days of Rosneft (OTC:RNGZY) and Sechin controlling the almighty oil and gas sector in Russia are firmly in place.