Russian Energy: Production sharing agreements and government attitudesThe conditions for production sharing agreements (PSA) in the Russian energy sector have changed considerably over the last 10-12 years. The Oxford Institute for Energy Studies in a new working paper by Timothy Krysiek examines why and how. The study explains important differences in the Russian government’s approach to each individual project. For the ongoing evaluation of the level of cooperation and discord in the relations between Russia and foreign companies this is an important paper. The results are highly relevant for an ongoing DIIS project on energy security aspects of EU-Russia relations and will be an inspiration for forthcoming DIIS publications on the topic as well as for a DIIS conference on energy matters to be announced next year. From the conclusion of the working paper: “President Putin has spent much of his time in office correcting the excesses of the Yeltsin era. Putin has reasserted state control over the Russian energy sector by seizing key assets, restricting foreign investment and building Gazprom and Rosneft into major energy conglomerates. However, after more than six years in office, the Putin administration is still grappling with the PSA projects bequeathed to it by the Yeltsin administration. Given the intractable nature of the PSAs, the government has been forced to employ a variety of regulatory tactics against Kharyaga, Sakhalin-1 and Sakhalin-2 to extract concessions from the operators and increase the government’s control over the projects. The nature of the Russian regulatory environment is such that the investor and the state are locked in a fundamentally confrontational relationship. Government officials have virtually unlimited freedom to review and investigate the activities of energy companies. The unique set of interrelated factors surrounding Kharyaga, Sakhalin-1 and Sakhalin-2 determined the government’s behaviour towards each project and its level of success in extracting concessions from the operators.” Svend Aage Christensen, Afvejninger I europæisk energipolitik, DIIS Brief, September 2007. Contact: Senior researcher Svend Aage Christensen, , who also recommends: Timothy Fenton Krysiek, “Agreements from Another Era. Production Sharing Agreements in Putin’s Russia, 2000-2007”, Oxford Institute for Energy Studies, WP 34, November 2007. |
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