Climbing the rainbow: The climate for foreign investment in Russian energy

Abstract

Summary The environment for foreign investment in Russian energy projects is still in its infancy. The current economic and political crisis is having the effect of further broadening the gap between the desired and the possible in relation to investors’ expectations. The climate for foreign investment in Russian energy is negatively affected by the grossly deficient normative framework, the political opposition and the instability of the operating environment. Enhancements to the structure of the Northeast Asian natural gas projects should include a more active government commitment to the projects, a stable tax and export environment, providing stronger protections to investors, and the participation of local partners ‐ in particular, Gazprom.