Expected 2008 Changes in Subsoil Use Legislation

Excerpt from Russian Petroleum Investor by Inna Gaiduk

The Ministry of Natural Resources expects that the government will approve amendments to the "About Subsoil" law that will considerably expand opportunities to distribute licenses by competitions, including investment. In addition, the package of amendments presented to the government includes revisions toughening the performance requirements under license agreement conditions and also regulates the modification procedures for operating licenses. There is also a second block of amendments to the law that concern restrictions of foreign participation in development of strategic deposits, but currently that package is undergoing interdepartmental coordination. By the end of 2008, the government plans to consider amendments defining the calculation of the size of harm caused to the state by subsoil users, changes to the procedures on conducting tenders and auctions for subsoil use rights and also revisions to the definition of the bases as well as the manner of change and specifications for subsoil blocks.

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Enel Plans a Vertically Integrated Power Company in Russia

Excerpt from Russian Petroleum Investor by Sergei Chernyshov and Andrei Shlyapnikov

Having carried out in 2007 unprecedented purchase transactions of Russian natural gas production and electricity generating assets, the Italian company Enel has declared plans to use these assets as a foundation for a vertically integrated power company. This is a very bold move for a foreign enterprise during a period of scale transformations in the Russian energy sector. Enel's success will depend on negotiations with Gazprom, along with its own generosity and flexibility. To other foreign companies, such as E.ON, Fortum, RWE, Gaz de France and others, that have or are planning to purchase electrical power assets in Russia, the Enel example will indicate what is possible in the Russian market.

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