(28.11.07) Under Putin, the Russian government has reasserted state control over the strategically important energy sector. The steady rise in global oil and gas prices and Russia’s increasing hydrocarbon production have rejuvenated the federation’s economy and enhanced its geopolitical power. The Putin administration has taken bold steps to bring privately owned and operated energy assets under its control.
In recent years, the Russian government has systematically destroyed Yukos, built up state-owned oil and gas champions Rosneft and Gazprom and restricted foreign investment in Russian hydrocarbon projects. In 2003, Putin signed legislation that greatly reduced the number of oil and gas fields eligible for development under PSAs and adjusted the federal tax code to make future PSAs less attractive to foreign investors. The Kharyaga, Sakhalin-1 and Sakhlin-2 were unaffected by this wave of legislation, but Putin’s actions made it clear that PSAs were no longer a viable method of foreign investment in Russian oil and gas. During Putin’s second term, the Russian government increased regulatory pressure on foreign-owned energy assets, including the Caspian Pipeline Consortium, the Kovykta gas
field and the three PSA projects.