1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. Mutual trade between the EEU members
    2. General approach
    3. Trade between EEU and non-EEU countries
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

Oil & gas

Alongside other natural resources, oil and gas remains the “flagship” and one of the most highly regulated sectors of the Russian economy. Its legal framework is centred around the regime of the Russian subsoil, its use and licensing.

Key contacts

Contact
Kozyrenko Natalia
Natalia Kozyrenko
Partner
Head of Energy & Climate Change

Licences

Issue and term of licences

Mineral rights are documented by a licence which is essentially a permit issued by the Russian state to conduct a particular type of activity in respect of a given subsoil block. Subsoil licences do not give any surface rights to the territory on which the activity is to be carried out. Therefore subsoil users must obtain land use rights (usually under a lease) separately (please see the Real estate and construction chapter).

Geological surveying licences

A licence for geological surveying is issued without a tender or auction:

  • generally for up to five years;
  • for up to seven years in respect of subsoil blocks located at least partially within certain Russian regions; and
  • for up to ten years for offshore blocks.

The validity term of a geological surveying licence can be extended to enable the licence holder to complete the works under the licence.

Exploration and production licences

Exploration and production licences can be issued for the project life span. Their term can be extended provided that the licence holder has not breached any terms of the licence and proved the need to extend the licence term in order to complete the production cycle within the licensed area.

Exploration and production licences may only be issued through a tender or auction, except (i) where a holder of a geological surveying licence has made a commercial discovery; and (ii) in respect of some of the strategic blocks exempted by the Russian Government from the standard tender/auction procedure.

Combined licences

Combined licences cover geological surveying, exploration and production. They can be granted in respect of blocks with proven reserves that require substantial additional exploration.

The issue conditions and term of this type of licence are the same as for an exploration and production licence.

Transfer of licences

Since subsoil licences are acts of government, neither the licences themselves, nor any mineral rights thereunder, are transferable (including by way of sale, pledge or other disposal or encumbrance), except pursuant to special rules set out in the Subsoil Law.

These rules specifically permit the transfer in certain instances (except for the transfer of licences to strategic blocks to companies with foreign participation), including a transfer:

  • within a group of companies (from a parent to a subsidiary, from a subsidiary to a parent and between subsidiaries as directed by the parent);
  • following a merger or consolidation of the licence holder with another company;
  • following a spin-off or split-off of a new company (from the licence holder);
  • from a shareholder to a joint venture where the shareholder holds at least 50% of the equity interest (subject to certain conditions). Foreign investors often enter into joint ventures with Russian companies on this basis in order to obtain access to their subsoil licences.

Any such transfer requires a special decision of Rosnedra. Licences to strategic blocks may not be transferred to entities with foreign participation other than with the permission of the Russian Government.

For the above reasons, an “acquisition” of a Russian subsoil licence is mainly possible through the purchase of an interest in the company holding the licence, or by forming a joint venture with the current licence holder and subsequently transferring the licence to the joint venture. In certain cases where obtaining an equity interest in the licence is not possible for regulatory or other reasons, contractual arrangements are put in place to give the foreign investor benefit of the licence.


Key contacts

Kozyrenko Natalia
Natalia Kozyrenko
Partner
Head of Energy & Climate Change