This thesis analyses institutional and organisational reform in the Former Soviet Union and Russia in order to examine the effects and existence of path dependency and institutional competition in the development of the Russian oil industry. Based on a New Institutional Economics and Transaction Costs Economics framework the thesis establishes a link between the evolution of the oil industry and the institutional matrix associate with the structure of state power. In the post-Soviet setting path dependency is created by the state's continued reliance on a patrimonial structure of state power. Resource and time pressure and the lack of a popular reform consensus resulted in the domination of the former mode of state power over the constitutional-bureaucratic system favoured by the International Financial Institutions. The transaction cost premium associated with the constitutional-bureaucratic structure and the appropriation of income and resources created a bias towards the historic structure of state power. Thus state survival was an important factor in creating path dependency. However, the thesis reveals that due to the less ideologically based political foundation there is greater room for institutional competition. While such competition has remained low at the state administrative level the thesis finds there is some evidence of institutional competition at the industry level. Two corporate strategies (the Soviet Styled Company and the Western Styled Company) have emerged from the original Holding Type Company. These two strategies display different approaches to income extraction, development strategy and ownership structure. The two strategies constitute the basis from which potential institutional competition in the oil industry may develop.