Attraction of Foreign Capital, Investment Projects and Mechanism of Production Sharing Agreements
Igor Krishtal, Ekaterina Lisovskaya
One of the most important factors of economic growth is foreign capital attraction. World practice shows that most countries use concessional economic principles in the form of production sharing agreements that establish a legal form of relations between the state and a private investor. Production Sharing Agreements imply large-scale long-term investment into oil-producing and oil-refining industries. It sets legal frameworks, contains conditions developed in a precise and detailed way that define rights and obligations of a foreign or a national investor and also rights and obligations of the state. First recognition of foreign capital and its advantages for dates back to 1982. Since then many legal enactments have been adopted and though being rather imperfect they represent a number of important steps in the development of Russian foreign capital attraction system. The most recent national law “About Production Sharing Agreements” was adopted in December 1995. Main advantage of this national law is that investments and loans related to Production Sharing Agreements are attracted on commercial basis and do not lead to the growth of the state debt.