15.000
%
Negative
107
mm boe
21
%
While Russia’s oil and gas sector has suffered from tax changes, it is the licensing and subsoil resources management that has undermined things further. Despite the enormity of these changes, it is still overshadowed by its invasion of Ukraine. Further sanctions are not ruled out, and the long-term effect of this period will dominate investment for some time to come. To reflect this position, our risk premia remains 15%.
April 13, 2024
Former Soviet Union
mm bbl
bcf
North Asia bordering the Arctic Ocean, extending from Europe (the portion west of the Urals) to the North Pacific Ocean.
Concession
A concession/royalty (called MET)/tax fiscal system is the basis for nearly all upstream licences and joint ventures in Russia. Joint ventures may include Russian oil and gas companies (ROCs), and/or international oil companies (IOCs). The government participates indirectly via its ownership of Gazprom and interests in other ROCs.
Russia remains at the lower end of the “mostly unfree” category. Pervasive corruption, the lack of judicial independence, and disrespect for private property rights severely undermine the rule of law, increasing uncertainty and investor risk. Extensive state interference discourages private-sector dynamism.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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