Open joint-stock company (JSC) ?Gazprom? is a recognized monopolist in the gas market of Russia . The structure of Gazprom includes about 70 joint-stock companies that are owned 100% by Gazprom, 48 organizations that Gasprol holds greater than 50% of shares, and 53 companies that Gazprom has less than 50% of their holdings. "Daughter enterprises" of the giant have the most varied activities, starting with gas production and finishing with the design and construction of its transportation facilities.

Gazprom?s share of the world gas reserves is estimated to be 16%.  The company controls 60% of the proven Russian gas reserves. As of end of 2004, Gazprom?s proven hydrocarbon reserves determined by methods in compliance with Russian methodology were as follows:

• Gas? 28.9  trillion cubic meters,
• Gas Condensate ? 1.22 billiontons,
• Oil ? 0.65 billiontons.

Among major problems of Gasprom it is necessary to highlight the following:

           Considering the growth of equity production by Gazprom, the volume of gas entering the United Gas Transmission System (UGTS) had almost reached the limits of its technical capacity by 2004.

• Consumption of fixed capital of the UGTS is 57.7%.   The projected lifetime of gas pipelines is 25 years and the average age of Russian gas pipeline is 24 years.  The economic life of the UGTS is approaching half a century: 17% of gas pipe-lines were in service for more than 35 years, another 41% are approaching the same age, 31% were built 10-20 years ago and only 11% are younger than 10 years.  Significant capital investments are required to maintain the system and to increase capacity to meet the growing need for gas supplies.
• Gazprom does not sell gas, but distributes it within the country , supplying gas to profitable export-oriented companies as well as to ineffective power-consuming industrial enterprises.  This results in the cross-subsidization of individual industries in the national economy .  Currently, natural gas is a major energy resource benefiting the Russian economy due to its low price and environmental benefits.  More than 35% of electric power in Russia is produced from gas.  Due to the artificial containment of price growth in the Russian domestic market, Gazprom loses a considerable part of potential income and doesn?t have sufficient funds for the modernization of its gas transportation system.