Север и рынок. 2014, N 5.

GAZPROM’S MNE IN BELARUS* Paller Clarence, student Simon Fraser University (SFU), Burnaby, Canada Shatalova Taisiya, student St. Petersburg State University of Engineering and Economics (ENGECON), Branch in Apatity, Russia Introduction Gazprom is a global energy company and is now one of the world’s largest Multinational Enterprises. The company was founded in 1989 in Siberia Russia and has since become one of the world’s leaders for business based on “geological exploration, production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel as well as generation and marketing of heat and electric power”[1]. Gazprom is in possession of the world’s largest natural gas reserves, this is made possible because of strategic geographical location in Siberia where “the Arctic field has estimated reserves of 4.9 trillion cubic meters, with the gas destined for Europe”[2]. To meet the European and world demand Gazprom has increased operations of production in Siberia. Currently the company is working on building “a 2,450 km Bovanenkovo-Ukhta pipeline to transport gas to the Unified Gas Supply System” which connects eastern Russia and western Russia (ibid). This Unified Gas Supply System of Russia has a total length of 168 thousand kilometers. This pipeline transports gas to over 30 countries worldwide, such as Belarus. More than half the gas however, is allocated to Russian consumers: Gazprom mainly operates in the European part of the triad. What makes Gazprom a Multinational Enterprise(MNE) Operations in Asian Triad On November 12th2013 Alexey Miller, Chairman of Gazprom's Management Committee, and Do Van Hau, President of PetroVietnam, came to an agreement to establish a joint venture for producing gas as an engine fuel in Hanoi, Vietnam. This agreement was signed and ratified between the two partners. CEO of Gazprom Alexey Miller stated that the “Russian-Vietnamese joint venture, is clear evidence of the active development of our strategic partnership with Vietnam...This joint project for gas to be used as a vehicle fuel in Vietnam is the first of its kind for Gazprom in the promising Asia-Pacific market. The project will help to improve Gazprom's economic performance, give it a wider geography in the Asia- Pacific market, and diversify the company's products”[3]. Gazprom and China Gazprom is also looking to expand into the people’s republic of China. On October 22nd 2013 in Beijing, Alexey Miller met with the Chairman of China National Petroleum Corp (CNPC) Zhou Jiping. In this meeting “both sides examined the prospects for bilateral ties with special attention paid to Russian natural gas supplies to Chinese markets”[4]. Expanding into China is of upmost importance to Gazprom because “China is expected to lead the world in terms of energy consumption growth” (ibid). Expansion to Other Parts of the Globe Gazprom has been carrying out work and partnerships with “India, Algeria, Venezuela, Vietnam, Libya, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan” for various objectives[5]. The contracts signed in those foreign countries have helped Gazprom reduce their costs by producing in nations where it can use the key inputs (such as cheap labor in South East Asian countries like Vietnam). By having its offices across nation to nation, Gazprom can easily adapt and set its price differently depends on the nation very own policy and price setting due to local and other foreign competitors as well as government domestic market protection strategy (tax, quota..). For example, Gazprom has its own strategy such as price setting for European consumers separate from Russian The Overall Corporate Strategy of Gazprom *Work completed with the support of grant of the Russian Humanitarian Scientific Foundation №14-02-00128 226