In short, steps must be taken now to maintain Russia's main economic growth engine, its oil and gas sector. Improving the Investment Climate If certain key issues are addressed in a positive and timely matter, then the legal and fiscal framework for investment in Russia's petroleum industry can be competitive with that of other countries around the world. An affirmative demonstration that Russia supports the PSA legal regime. A Tax Code that supports and does not conflict with the tax provisions currently contained in the PSA law. Federal and regional Russian governments committed to expedite immediately the full implementation of the grand-fathered PSAs consistent with their contractual terms and conditions.
Timing is important.
U.S. and foreign corporations will turn away from Russian investment unless substantial progress is made on all of these issues within a reasonable and definitive time frame. On the other hand, if these issues are addressed in a positive and timely fashion, the legal and fiscal framework for investment in Russia's petroleum industry can be competitive with that of other countries around the world, and Russia can begin to reap benefits from foreign investors. The Russian Government should affirmatively demonstrate to investors its support for the PSA legal regime. Moreover, new legislation should not undercut the legislative progress made to date. As an example, new Tax Code provisions currently under development in the Duma should support and clarify the tax regime applicable to PSAs.