The decision has been described as the latest move by the Kremlin to reassert state control over Russian assets and it has caused concern in those who believe it will contribute to the destabilizing of the Russian economy as it will prevent foreign investment in the country’s energy industry and possibly discourage future foreign investment in other areas.
The announcement represents a startling reversal of policy by the Russian authorities who, up until very recently, had been courting international investment. However, the decision does draw parallels with the resent Yukos saga.
Yukos, a major Russian oil company, was forced to sell its prized asset, Yuganskneftegaz, last year to the state-owned Roseneft after it was forced into bankruptcy by a crippling respective tax bill from the Russian government. Many observers described the saga as a deliberate ploy to transfer the ownership of a significant domestic asset from parties not friendly to the Russian government to parties that were.
Many foreign energy companies will now be trying to get a grip on where they stand in light of the new ruling. Some with pre-existing arrangements, like ExxonMobil, are facing losing their agreements, while other for instance BP, look set to lose newly negotiated deals. Even domestic companies with significant foreign investment, like Lukoil, are set to be frozen out.
The natural resources affected by the decision include: the giant Sakhalin-3 oil field in Russia’s far east, the Barents Sea fields, the Roman Trebs field, the Sukhoi Log gold field and the Udokan copper deposit in Siberia.
