Just before Christmas, President Vladimir Putin signed a law ending limits on foreign ownership of shares in Gazprom, the country's natural gas export monopoly, which is 38% owned by the Russian government. Then on 1 January, a dispute flared between Russia and neighbouring Ukraine over the terms on which Gazprom's gas is shipped through the country and into western Europe.

For a few days, natural gas supplies to countries such as France and Germany dropped 40%, threatening a chilly winter for nations dependent on Gazprom for their energy.

So global investors are allowed to buy Gazprom stock, yet they will be wondering whether it's worth the trouble. Gazprom shares will always be undervalued until the company makes a simple decision: does it want to be a leader in the global energy industry or an arm of Russian foreign policy?

The idea that Gazprom should find itself among the ranks of BP and Exxon Mobil is far from fanciful. In 2004, the company signalled its intention to become another Exxon. Gazprom chief executive Alexei Miller has said he expects Gazprom to be the largest energy business in the world within four to five years.

And it certainly has the potential to think in those terms. Gazprom, which controls 16% of the world's known natural gas reserves, is already the biggest producer of that commodity.

The company's share price has been soaring, as the value of energy rises and as it takes more of the western European market. You could buy the shares for about 13 roubles in October 2001. Now they are valued at more than 190 roubles.

Until last month, foreign investors were prevented from owning more than 20% of Gazprom's shares, and were not allowed to buy them locally. That has now changed.

"For Gazprom, it certainly means the opportunity to attract new investments, including top-class foreign investors, " said company chairman Dmitry Medvedev as the news was announced.

For all its attractions, Gazprom has some way to go before it takes its place alongside BP and Exxon, both run for the benefit of their shareholders. They may well have extensive contact with their national governments, but nobody would claim BP puts politics before business.

Gazprom hardly looks like a private company at all.

Miller worked with Putin in their native St Petersburg.

Medvedev is also first deputy prime minister, and one of Putin's closest colleagues.

The line between government and company is very fine.

That's why the gas dispute with Ukraine is so worrying.

The price at which Russian gas is shipped to western Europe through former Soviet republics is a complex issue. Gazprom used to sell energy cheaply to the former satellites as a legacy of the old command economy. It can argue with some justification that it should charge market prices and it is certainly entitled to object to gas destined for Ukraine being sold at surplus profit to other countries.

At the same time, it is hard to escape the thought that the Russian government is pressuring Ukraine by using gas supplies the way Soviet leaders used tanks and soldiers to ensure subservience.

Putin clearly aims to prevent Ukraine from moving closer to integration with the European Union than Russia has been able to do.

Gazprom shareholders will be conscious that a company cannot be a market leader unless it pursues its own interests. And Russia could use a company that can integrate with the world economy a lot more than it needs political leverage in Ukraine or Belarus.

There is no reason why Gazprom cannot serve as a model . . . as long as it refuses to be an instrument of Russian foreign policy.