Russian Federation

Investment & Operational Criteria

Key Indicators

Risk Premia

15.000

%

Outlook

Negative

Rating

DDD|5H|-

Ranking

103

Reserves (1P)

Total

mm boe

Oil

21

%

Summary

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%.

Updated

April 13, 2024

Country Basics

Region

Former Soviet Union

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

Russian FederationRussian Federation

North Asia bordering the Arctic Ocean, extending from Europe (the portion west of the Urals) to the North Pacific Ocean.

Outline

Tax Regime
Type

Concession

Tax Regime
Notes

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.

Investment & 
Operational
Climate

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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