Partnerships between Russian and Foreign Companies in Russia's Oil Sector
Nina Poussenkova, Institute of World Economy and International Relations, Russia
The author studies the involvement of international oil and service companies (BP, ConocoPhillips, Schlumberger, Halliburton, etc) in the Russian energy sector which began on a wide scale in early 1990s. The paper discusses the benefits provided by such corporate partnerships for Russia: investments, advanced equipment and technologies, management practices, experience in environmental stewardship, sustainable development and corporate social responsibility. In mature oil provinces, they help to enhance oil recovery and remedy the polluted environment; in new petroleum frontiers they contribute their experience in developing “greenfield” territories with due account for environmental considerations which makes a total contrast to the Soviet approach. The author focuses on the projects Sakhalin-1 (ExxonMobil, SODECO, Indian National Oil and Gas Company and Rosneft) and Sakhalin-2 (Shell, Mitsui and Mitsubishi) implemented under PSA terms and studies their role in improving living standards on this poverty-stricken island and for ensuring sustainable approach to oil production. The paper focuses on such important environment-protection mechanisms, installed largely because of Russia’s energy sector integration into world economy, as ISO certificates, environmental audits or QSHE (Quality, Safety, Health and Environment) systems. The author investigates problems the international majors face in Russia, where environmental issues are often used as a political lever in relations with foreign companies that are closely monitored by local authorities and NGOs. The paper focuses on “learning from each other” within such corporate partnerships: experience shows that the direct transfer of environmental approaches from the West to Russia does not always work in Russia’s particular economic and social situation, and foreign companies have to learn to adapt their traditional tools to the national specifics. The author makes an emphasis on the latest institutional developments in Russia: a strong focus on the relationship within the triangle “the state – business – society” and discusses its possible implications for foreign corporations.