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LETTER FROM: THE CONGRESSIONAL FSU ENERGY CAUCUS

The countries of the former Soviet Union are becoming increasingly important for
the U.S. economy as they transform themselves into market economies.  This is
especially true where energy is concerned.  FSU energy companies often control
vast hydrocarbon reserves, and many are becoming increasingly important trading
partners for American businesses.  Our country's security interests are at stake in
the region's energy sector as well, given Iran's ongoing bid for influence in the oil-
rich Caspian Basin and Central Asia.

Hundreds of U.S. energy companies are doing business in the former Soviet Union
already.  They range all the way from the smaller independents, who first led the
way in these markets, to major oil companies embarking on massive, long-term
development projects, along with numerous providers of specialized tools,
equipment and supplies.  U.S. energy companies are selling drilling rigs, exploration
and development equipment, oilfield services, and even complete oil refineries in
the FSU today.

Jobs, Prosperity, Security

The success of these companies is important to the U.S. economy.  Energy trade
with the former Soviet republics means job creation through the increasing export
of U.S. goods and services for the FSU energy sector.  It means access to some of
the world's richest energy reserves to help meet our country's own energy needs. 
And it means greater security for the United States, as a result of more stable and
prosperous economies in the FSU.

Not surprisingly, there is a great deal of competition in the FSU's promising energy
markets.  This is a healthy part of the region's transition to a market economy. 
The realities of the global marketplace, however, mean that U.S. companies'
competitors are often heavily backed by foreign governments.  Japan's Mitsui, for
example, signed a $700 million oil-well rehabilitation deal last year with LUKoil,
Russia's largest oil company--guaranteed by the Export-Import Bank of Japan.  In
the Russian Far East, Germany's Kloeckner Humboldt Deutz will sell $50 million
worth of equipment for a petroleum terminal at the port of Vostochny, financed
through a $1.7 billion credit line from the German state foreign trade insurance
company Hermes.

Congressional US--FSU Energy Caucus & Institute

The Congressional US--FSU Energy Caucus was founded in early 1992 to promote
US--FSU energy trade.  Presently over forty members of Congress belong to the
Caucus.  The Caucus has several purposes.  

-- to educate members of Congress about the importance of stepped-up energy
trade between the U.S. and the FSU countries;
-- to promote legislation in  the U.S. and the various FSU countries to facilitate a
more stable investment climate in the FSU energy sector;      
-- to prevent enactment of legislation harmful to U.S. trade in the FSU energy
sector;
-- to encourage the Administration to grant higher priority to U.S.--FSU energy
trade; and
-- to facilitate better communications between the Congress and American     
industry on one hand, and key energy officials of the FSU countries on the     
other.

Caucus members meet frequently with officials of the Department of Commerce,
the Department of Energy, the Department of Energy, EximBank, OPIC, the
National Security Council and other federal agencies that support energy trade with
the FSU.  Caucus members have also met with key FSU officials, including
Azerbaijan President Gaidar Aliyev and Russian Minister of Fuel and Energy Yuri
Shafrannik.

The Congressional US--FSU Energy Institute was founded in April 1992 to support
the activities of the caucus.  Members include some of the most important U.S. oil
and gas, energy service, and equipment supplier companies doing business in the
FSU today.  Together the Caucus and the Institute conduct special briefings and
workshops on FSU energy matters and related issues at various federal agencies;
work closely with the Gore-Chernomyrdin Commission on energy issues, and hold
special functions for members of the Caucus and their staffs. 

Hanging In

The FSU is a tough place to do business, but we have to hang in if we want to
protect our country's interests and reap the rewards of the region's changing
economy--in terms of jobs, economic growth, and national security.  If we wait for
the situation to stabilize, we'll lose out to our international competitors, who are
committed to doing what is necessary to make the most of opportunities in the
FSU energy sector.  Hanging in there means continued federal support for U.S.
companies--through the mainstays of trade finance, advocacy, and information
programs--as they do the heavy lifting to create jobs and build a prosperous U.S.
economy for the next millennium.

Rep. Curt Weldon (R-PA)Rep. Steny Hoyer (D-MD)                               
Rep. Greg Laughlin (R-TX)Rep. Glenn Poshard (D-IL)                                             
Co-chairmen                                         
Congressional US--FSU Energy Caucus
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