Something strange happened last week: Russia's largest independent gas producer, Novatek, surpassed in market value state behemoth Gazprom for the first time ever. Yet, as strange and possibly even unnatural as this may seem to some more casual observers of the Russian gas market, Novatek's value has been rising consistently over the last years while Gazprom's has kind of stagnated.
The most obvious difference between the two is ownership. Gazprom is majority owned by the Russian state. This means it caters mostly to its interests rather than the interests of its minority shareholders, as Bloomberg's Elena Mazneva and Dina Khrennikova note in a recent story. It also means the company undertakes projects with uncertain returns as a state company, and private shareholders like certain returns.