Russia is regaining the position that the Soviet Union once had as one of the world's energy powerhouses and exporters, but it is not achieving this across the board.

Its production of oil has improved dramatically, but problems remain in gas and electricity. All industries need to increase output with less damage to the Russian environment.

Russia also has important energy regulatory reforms to carry out. Its oil industry has now been largely privatised, though the government still retains some control over domestic shipments through the state-owned Transneft pipeline monopoly and exports through quotas and taxes.

Change is also on the way for the electricity sector, and even the gas sector although much depends on the giant Gazprom company that dominates the industry.

Nobody, however, would want to see the chaos of early oil privatisation repeated in these other sectors. "It is more important the Russians get it [regulatory reform] right than they get it fast," says a western diplomat.

The early post-Soviet years saw a big drop in oil production, from the peak in 1987. In that year the Soviet Union pumped 591m tonnes or nearly 12m barrels a day. But as Russia's economy shrank in the early 1990s, so did its oil output - to 301m tonnes in 1996.

At the same time, the industry was carved up among new owners and managers. Some were already oil men, such as Vagit Alekperov who heads Lukoil, the largest oil company. Others bought into the industry. The banker Mikhail Khodorkovsky bought his way into Yukos, now the second-biggest oil company. Still others are in the oil sector as financial investors, such as the joint US-Russian group Access-Renova, and Alfa Bank. Together both groups own virtually all of TNK, a middle-sized oil company.

While more than 130 companies produce oil in Russia, only 12 pump more than 10m tonnes a year. Eleven of these account for nearly 90 per cent of crude production and nearly 80 per cent of refining. Further consolidation is likely.

First, the state has someprivatisation left to do, and this year is expected to sell part of its share in the oil company Slavneft. TNK, which already owns 10 per cent of Slavneft, would be a logical bidder. Second, some of the bigger companies have plenty of cash in hand, because they have prospered since the Russian financial crash of 1998.

The 1998 devaluation of the rouble against the dollar sharply reduced local production costs in dollar terms and equally increased the returns (in rouble terms) of export earnings.

The currency change also coincided with the start of the long run-up in world oil prices, interrupted by the September 11 terrorism attacks on the US, but only for a few months.

As a result Russian oil production has been booming. Output rose 6 to 7 per cent in 2000 and 2001, and is expected to do the same this year.

Russia agreed to help Opec stabilise the oil market this spring by reducing its exports (from the relatively high level experienced in the third quarter of 2001) by 5 per cent. But this Russian self-restraint is not expected to last long because, among other things, it has depressed domestic fuel prices.

The bigger Russian oil companies are pushing to expand exports. Lukoil and Yukos are competing to buy refineries and in some cases service stations in central Europe and the Balkans, while Lukoil has established a beachhead in the US by buying the Getty chain of service stations.

Inevitably, Gazprom is the centre of the gas story because it accounts for 90 per cent of output. Its own prediction is that its output may fall further, or at best stabilise at 1999 levels until 2020.

Such projections are important to the Russian government - around 20 per cent of its budget revenue comes from Gazprom - and to its foreign customers in Europe, to which Gazprom shipments are due to rise from 130bn cubic metres in 2000 to 200bn cm in 2008.

One possible offset to the Gazprom decline is gas "associated" with oil, which ought to be rising along with oil output but which is hard to market because Gazprom controls access to pipelines and prices.

The government has talked of "unbundling" Gazprom's pipeline network from its production units so that all producers would have access to the pipelines.

In the first half of the 1990s, Russian gas prices rose to nearly 60 per cent of European levels, but the gap has since widened. In February this year gas prices were increased 20 per cent but this still left them at 20 per cent of European prices.

Gazprom has many deals in the pipeline. These are its joint venture plans with ENI of Italy to develop high-sulphur gas in Astrakhan, with Shell to extract deep gas and oil from Zapolyarnoye in Siberia and with TotalFinaElf, Conoco and other foreign companies to develop the offshore Shtokman field in the Barents Sea.

However, in the past three years, Gazprom has taken to importing central Asian gas, some of it for re-export, as a cheaper alternative to developing new Siberian fields.

Electricity reform ought to be easier, if only because it is being pushed by one of Russia's leading reformers, Anatoly Chubais, who now heads the dominant electricity company, United Energy Systems (UES).

The plan is that UES - which is 52 per cent owned by the state and 48 per cent by private Russian and a few foreign investors - would be carved up. The roles of managing the high-voltage grid and of central dispatcher would stay under state control, while the big electricity generators and perhaps regional generators and secondary grids would pass into private hands.