Question

What kind of political risk Gazprom (largest energy producer in Russia) has suffered and how it impacted the company?

Answer 1

The Gazprom  is the energy producer company that has the state as a majority share holder. It makes the company to be the biggest sufferer of the unstable political relationship between Russia and other nations such as EU. Russian government used Gazprom  as a tool to build relationships and ties with the nations who were willing to trade with the Russia. But, nations or unions suspicious about the intentions of the Russian government, went on to object the projects taken up by Gazprom. Since Gazprom  had to pursue the projects that go through the international borders or via other nations, then it was very important for the Gazprom  to have Russia building cordial ties with other nations. But, it could not happen and unstable political relations and cold strategic ties of Russia with other neighboring nations, created constraints in the projects pursued by Gazprom and the company suffered.

It impacted the company negatively and its investors started selling its shares in the capital market. As a result, market capitalization of the company shrank quickly. It increased the negative motivation among the employees of Gazprom. As a result, the company suffered drastically.