Privatization of Russia’s energy sector and establishment of Rosneft Oil Company

Aim. To make a comprehensive analysis of the process of privatization of the Russian energy sector, as well as to identify the main stages of establishment of Rosneft Oil Company.

Objectives. To identify the key stages and directions of privatization of the Russia’s energy sector; to highlight the features and factors that influenced the course of privatization of the Russia’s energy sector in different periods; to review the main differences in the approach to the privatization of oil companies in Russia (comparison of Rosneft and other companies in the industry); to characterize Rosneft’s path of establishment in comparison with other domestic oil companies; to assess the political and socio-economic outcomes of the privatization of the Russian energy sector.

Methods. The study is based on the methods of systemic and economic analysis, the system of expert assessments, as well as general scientific methods of studying economic phenomena, including the analysis of historical sources, time series, as well as the analogy approach.

Results. The features of privatization in Russia are highlighted, as well as its impact on the development of the domestic economy. The evaluation of the results of privatization is given, and the reflection of its results in the country’s modern economy is shown. The conclusion about the neutrality of ownership forms, the predominant influence of institutional and organizational factors is substantiated. Special attention is paid to reviewing the process of privatization of the energy sector. The stages and peculiarity of this process in the energy sector are studied, which consisted in the fact that the oil industry managed to implement a special format of privatization in the form of corporate associations of several interrelated economic entities. The importance of the state-owned company Rosneft in returning the system-forming role of the state in the oil industry is considered separately. The main stages of the company’s development, which resulted in its transformation into a global energy company, are highlighted. Emphasis is placed on the importance of diversification and technological development for the future of Rosneft Oil Company.

Conclusions. The privatization process in the 90s of the XX century in Russia as a whole was characterized by the lack of an adequate level of preliminary preparation and elaboration of the reform program, inconsistency of steps and chaotic socio-economic transformations. The privatization of the Russian energy sector, in particular the oil industry, faced the same problems as in other sectors of the economy: violation of formal procedures, colossal understatement of the real value of assets, withdrawal of the most liquid assets from state control. Assessing the results of the privatization of sectors of the national economy, including the energy sector, we can conclude that our country’s political leadership of that period made a strategic miscalculation. The latter resulted in a steep decline of the living standards of the population, technological inferiority and resource-based model of the country’s development. In the early 2000s, the government’s course in the oil industry was adjusted: the energy sector began to be regarded as the most important sector of the economy, a key taxpayer and a partner in the implementation of social projects of the Russian Government. Retaining Rosneft in state ownership and further consolidation of oil assets under its management played a huge role in returning the state’s backbone role in the oil industry. The sale of Rosneft would have meant the final withdrawal of the state from the oil industry. The consequence of this would be Russia’s withdrawal from the big global energy game and loss of political subjectivity.

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