The Russian Federal Anti-Monopoly Service all but admitted defeat when its director, Igor Artemyev, announced Jan. 12 that the Moscow Arbitrage court ruled that Gazprom will be allowed to buy domestic production assets without restrictions, Russian business publication Kommersant reported Jan. 15. The court's decision — which came about a year and a half after the case was introduced in the judicial system — likely was ensured by Gazprom's patrons in the Kremlin, such as First Deputy Prime Minister and Gazprom Chairman Dmitry Medvedev. The Anti-Monopoly Service ruled in September 2005 that Gazprom would not be allowed to increase its production assets by buying controlling stakes in its competitors. This restricted Gazprom's ability to subsume the few remaining independent natural gas producers in Russia. Since the restriction is no longer in place, Gazprom is free to take over the entire production sector. Gazprom, in effect, is going to increase its production capacity substantially without tapping a single new deposit — and it desperately needs new production to meet ever-increasing demand. The latest ruling allows Gazprom to expand its existing monopoly on natural gas export and transportation to include production as well. Of some 47.8 trillion cubic meters (tcm) of reserves in Russia, Gazprom holds approximately 29.1 tcm. Novatek holds approximately 1.2 tcm; Itera has at least 1.13 tcm in reserves; and other independent companies such as Nortgaz Ltd. and Rospan International — a subsidiary of the joint Russian-British venture TNK-BP — hold the rest. Gazprom has been moving in on all of the above businesses. Gazprom owns a 19.9 percent stake in Novatek and has been working to take control of Itera's production assets, buying 32 percent of the company's Purgaz subsidiary and 51 percent of Itera's Sibneftegaz subsidiary. Such a takeover by Gazprom will spell the end of Novatek and Itera as independent entities. While neither independent company has invested a lot of funds in its assets, Gazprom has been even stingier — the giant rarely invests in anything beyond pre-existing production assets, preferring to wrest control over existing production from other companies rather than develop new sites. Gazprom's move to gain a monopoly on production is more of a political step than an economic one. Although the Kremlin is increasingly gaining influence over the country's energy sector, the state-controlled company leading the charge in natural gas has not shown itself to be a good manager of that sector's assets. However, it has been the Russian government's policy to take control at any cost, and the Moscow Arbitrage court's decision allows Gazprom to do just that.