Zee Beam News

18 July 2007 - Upstream OnLine - Reuben Jeffery, the newly appointed US Under Secretary of State for Economic, Energy & Agricultural Affairs, has urged Russia not to shut the door to foreign investors, saying one draft of a law being considered by Russian legislators could hinder investment in 37 industrial sectors on strategic grounds. Russian legislators have so far spent more than two years trying to agree on what they will define as strategic, although the Kremlin has moved to expand state control to the aviation, defence and energy sectors. Foreign energy players have already been forced to hand over control of major oil and gas projects, and some fear similar policies could affect other sectors too. "When it comes to the strategic sector law, under some drafts, it would review 37 sectors," Reuters quoted Jeffery as saying. Instead of tightening controls through legislation that would discourage foreign business, Jeffery called for lighter rules that would "keep Russia open and competitive". On his first foreign visit since taking office last month, Jeffery was upbeat about US-Russian business ties. He said it was understandable Russia might wish to declare some sensitive sectors as strategic, but added these should not hamper business links. He also urged the Kremlin to allow large foreign multi-nationals use their expertise to help develop new gas and oil projects. A strong rule of law, free media, tough anti-corruption measures and more refined regulatory controls would all help boost foreign confidence in Russia's growing economy, he told the American Chamber of Commerce in Moscow. His comments on foreign investment controls follow a call from Ben Haynes, who heads ExxonMobil's Russian unit, for Moscow to clarify the current rules for oil and gas exploration. Haynes complained that under new laws, it was unclear if foreign investors would have to hand over newly-discovered finds to Russian companies if they proved to be larger than anticipated.