This summer, the Sakhalin-2 consortium reached an important milestone by producing the first oil from its PSA, and in October the Duma approved the Northern Territories project as a PSA on its third reading. But we should not delude ourselves. We have been talking about needed legislation for years. And a number of major PSA projects like Timan Pechora, projects that promise to bring tens of billions of dollars of investment into Russia, have been in limbo just as long. And companies have been pulling out of Russian projects because of disappointing investment conditions.
Energy companies see Russia's petroleum resources as a great opportunity.
But in the boardroom, Russian opportunities must compete for a company's attention and resources with opportunities from all over the world. And right now, despite its potential, Russia's energy sector simply does not appear as attractive to investors as it ought to be. Recent events unfortunately have tarnished Russia's image. Western and Russian investors in Sidanco are facing losses of hundreds of millions of dollars. Tax and other pressures are increasing on the joint ventures.