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FNI PROJECTS

The Energy Complex and Russian Political and Economic Development

Despite the proclaimed goal of 'modernization' and emphasis on developing knowledge-based sectors, Russia is still critically dependent on the output from its energy sector, first of all the oil and gas industries. Today, control over financial flows generated by the export of hydrocarbons has turned into the central issue of the internal political struggle concentrated inside the presidential administration. In this respect, the attack on Yukos launched in mid-2003 marked a watershed in Putin's presidency. The interpenetration of energy and politics has reached such intensity that it appears quite certain that the oil and gas sector will play a crucial role in determining the outcome of the transition to a post-Putin political and economic system. Simultaneously, the energy complex will be strongly affected by broader political and economic developments.

The primary goal of this project is to contribute to a better understanding of the impact of Russian political and economic developments on the energy complex and vice versa. The project will also contribute to expanding Norwegian expertise on key matters related to the political profile of Russia's energy complex and stimulate closer cooperation between the five participating institutions.

In the sub-project carried out at FNI, the main hypothesis put forward is that concerns for development of the resource base will play a role in the continuing development of Russian energy policy, and that it is likely that the present policy of strong direct state involvement will fail to deliver. This may in turn lead to a re-assessment of policies with regard to private Russian companies as well as the role of foreign oil companies in Russia. However, other driving forces, as mentioned above, will also have to be considered in the final analysis.


Project leader: Arild Moe


Project period: 2005-2008


Publications:

Kryukov, Valery and Arild Moe, 'Russia's Oil Industry: Risk Aversion in a Risk-Prone Environment'. Eurasian Geography and Economics, Vol 48, No 3, 2007, pp. 341-357.
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 Related focal points of research:

   Polar and Russian politics


Project funding:

   Statoil
   Norsk Hydro
   Norwegian Ministry of Petroleum and Energy


 External cooperation partners:

   ECON
   Norwegian Defence Research Establishment (FFI)
   NUPI
   PRIO
   Institute of Economics and Industrial Engineering, Novosibirsk



Fridtjof Nansen Institute
P.O. Box 326, 1326 Lysaker, Norway. Tel: (+47) 67111900 / E-mail: post (+@fni.no)