How to attract investors in the sphere of subsoil use

It is well known that Russia is one of the few countries with a huge reserve of natural resources. In addition to oil and gas supplied to dozens of countries, our country produces gold and diamonds, coal, iron ore, non-ferrous and rare-earth metals, and many other minerals. The mineral sector accounts for more than a third of the country's GDP, with about half of the revenues going to the federal budget and 100% of the excess profits going to the National Welfare Fund and the Reserve Fund of the Russian Federation.

Apart from direct revenues to the budget and state funds, oil and gas companies are the largest taxpayers: profit taxes paid by them account for about 30% of all revenues to the tax system. Therefore, in the current environment of global economic and political changes, it is important not only to maintain these positions, but also to increase them effectively.

Due to the unfriendly actions of the West in relation to the budget-forming Russian companies, changes in the geography of supplies and an increase in demand, the costs of hydrocarbon production have increased markedly. This means that Russia has to attract new investors to the extractive industry. But despite the fact that the industry itself is quite attractive for investment, new players in this area still need to be sure that their financial investments will be guaranteed and bring a stable profit, while the risks will be minimized.

How to make NHS investment projects more attractive to potential investors?

Andrey V. Tretyakov, Director of NAEN, spoke on this issue at the regular forum "Mingeo". He proposed to apply to the leadership of the Russian Federation with a proposal to introduce a system of national standards in the field of mining and geological auditing in financial organizations.

According to Andrey Tretyakov, this will allow:

  • to introduce a sovereign independent geological and economic evaluation of enterprises;
  • monitor the real value of companies' assets at the current moment in time;
  • monitor the activities of organizations engaged in the development and use of mineral resources;
  • provide annual reports in the field of subsoil use.

Thus, the activities of oil and gas production companies and the entire natural resources sector will become more open and transparent, and therefore more attractive for investment.

How will Russia benefit from increased investment in the industry?

The global political and economic instability has led to periodic "storms" on the hydrocarbon market: oil and gas prices change sharply and an imbalance between supply and demand arises. At the same time, the overall demand for energy resources is constantly growing: Russia is opening up new markets for itself by redirecting the flow of supplies from Europe to Asian countries. Russia is developing new fields, including previously inaccessible deep-sea shelves, and building new oil and gas pipelines. All this requires considerable financial investments.

If the Russian leadership accepts the proposal developed by NAEN director Andrey Tretyakov, Russia will be able to attract major global investors in the extractive industry, who are already interested in such a partnership, but want guarantees in terms of risk-free. In turn, the introduction of a system of national standards, improving the reliability of the estimates in the financial structures will increase the production of hydrocarbons and will allow to ensure their transportation to end users in a short time. As a result, it will have a positive impact on the development of the Russian economy and help to neutralize the negative effects of Western sanctions.