Due to the inaction of the government in the field of production-sharing agreements (PSA) the government missed out in between USD 5 and USD 10 billion roubles in revenues over the past five years, and about USD 800 mln for the past year. This opinion was expressed by the Chairman of the State Duma Commission for Review of Legal Issues Related to Use of the Sub-Soil, Sergei Ivanenko a briefing on October 12, 2001.

According to Ivanenko, the Commission assessed the performance of the government in this field as unsatisfactory and adopted a decision to prepare an address to the President on the situation with implementation of production-sharing agreements and submit it to the chamber. Even though the State Duma confirmed by its laws the list of 28 deposits, noted Ivanenko, not a single agreement had been signed for these deposits. "Instead of simplifying the two-tier procedure of implementing the agreements that had previously been effective (government - authorised ministry), now the procedure become three-tier (government –authorised ministry - authorised companies "Zarubezhneft" and "Rosneft").

In addition, according to Ivanenko, the work of negotiating commissions on specific projects goes extremely slowly and some of these commissions have still not been formed. Not a single project was implemented after the adoption of the PSA law, and the Sakhalin-1 and Sakhalin-2 projects effective today began their work before adoption of this law. Ivanenko sees ways of resolving this problem in changes to the staffing policies of the government, as well as the creation under the President of Russia of a corresponding investment agency which would adopt decisions on these issues.

Based on RosBusinessConsulting reports

See also:

PSA Legislation