Sometimes Russia’s state-run energy business seems to operate under the George Costanza strategy of “do the opposite” – if it makes good sense according to market logic, do something else.  Before the economic crisis, Gazprom figured among the top six largest energy companies in the world, but has since fallen to 11th by market capitalization.  Analysts in the banking sector are worried about reinvestment in production, while other experts think that the dwindling profits and rising debt are likely to sharpen energy politics between Russia and Europe as  the company could seek to renegotiate contracts.  Despite all these signs that spending should be tightened, Gazprom’s ongoing expansion acquisitions are increasing the company’s bloat, with the latest target being Sibir Energy.

It is a business transaction that, like so many others these days, highlights a number of systemic problems imposed upon the business sector in the absence of a functioning legal system.  Whether you are a foreigner or a local, when someone owes you a lot of money, there’s just not much local recourse outside of having the government step in to take ownership of the company.