This NY Times article provides a good analysis of the the difficulty that Russia’s largest oil and gas companies are having in translating their huge reserves into stature among the world’s major oil and gas companies in the marketplace for investors. The article starts by noting the huge potential in the Russian oil and gas business:

By rights, Russia should have a world-class energy company. It has 6 percent of the world’s oil reserves and pumps 10 percent of daily global production, rivaling Saudi Arabia. And its economy has rebounded as oil-consuming nations east and west turn increasingly to Russia for energy supplies.

However, that potential has not yet translated into success. The article uses the example of Lukoil, one of the two Russian majors:

But the very things that make Lukoil work in Russia are holding it back in the rest of the world, analysts and industry experts say: Lukoil remains a very Russian company, with all that has come to imply, from its complex structure and opaque finances to its inefficiency and dependence on the good will of the Kremlin.

In short, the lack of business management development under the old Soviet Union’s economy continues to bedevil Lukoil in comparison to other major oil and gas companies:

Though publicly traded as a single entity, Lukoil is structured more like a decentralized web of fiefs, and some investors say it is often unclear how profits flow to the center of the group or whether its published accounts fully capture what is going on.
“Some of the units within Lukoil, like Permneft, are, in management terms, very autonomous,” said Ian Hague, co-manager of Firebird, a hedge fund specializing in Russian investments. “The amount of oil they’re producing, as compared to net income, seems to show that large sums – hundreds of millions of dollars – are going places not clear to investors.”
“Investors don’t like things that are difficult to explain,” Mr. Hague said. “If Lukoil is running an expensive ship, meaning more of their money goes to administrative costs than others, investors view that as a problem.”

Stocks of American majors like Exxon Mobil and ChevronTexaco are now trading at price-to-earnings multiples in the mid-teens, based on estimated earnings over the next year. But Lukoil’s multiple is just 7.9, in the middle of the Russian oil pack.

Now a decade and a half after the fall of the Soviet Union, is it fair to ask whether Lukoil and Yukos (the other Russian oil and gas major) will be able to achieve stature equal to the world’s oil and gas majors in the marketplace for investors without the importation of Western oil and gas management expertise?