Overview of Investment Environment in Russia

R. Byron Ratliff

The Russian Federation has attracted considerable interest from American petroleum investors lured by its huge oilfields, vast virtually unexplored and uninhabited regions and declining production capability. However, investors have often found that political and economic instability, currency restrictions, inconsistent tax policy and lack of a suitable legal framework frustrates serious consideration of the seemingly attractive investment opportunities.

The Russian government has recognized that these factors are inhibiting investment and have begun consideration of legislation that would solve many of these problems by implementing production sharing agreements to replace joint ventures as the primary vehicle for foreign investment in its petroleum industry. An update on the progress of this vital legislation will be provided as well as a summary of the outlook for investment in light of these new developments.

Mr. Ratliff has lust returned to the Houston office of Price Waterhouse after a 3-year posting in the Moscow office as Director of Petroleum Services for the former USSR. While living in Russia, he worked with the Russian government, World Bank and US Department of Energy advising on the construction of a model production sharing agreement for use in the Russian Federation. He was a founding board member of the American Chamber of Commerce in Moscow and an officer of the organization. Mr. Ratliff is now a tax partner in the Houston office of Price Waterhouse concentrating on international petroleum taxation matters and heads the Russia Desk.

AAPG Search and Discovery Article #91020©1995 AAPG Annual Convention, Houston, Texas, May 5-8, 1995