Notion and Nature of Ргоduсtiоn Sharing Agreements in Russian Investment Law

The Russian Federation owns significant reserves of minerals resources. Industries related to extraction of resources create main profits of the country, make an impact on stability of budget revenues. In this regard establishing of the effective and equitable legal regime of mineral resources development, taken into account that interests either of individuals and businesses or of the government shall be accommodated, is the significant challenge of the governmental authorities. The necessity to make considerable initial and constant investments is the key characteristic of mineral resources fields’ development, particularly those containing oil and gas. For the purpose of securing economic growth, the government is obliged to set up specific terms, required for attraction of the capital to the industry, as well as to form sound investment environment and create stable legal mechanism for investment projects’ implementation. Production sharing agreement (PSA) is the existing contractual framework, established by the special Russian law, and enabling implementation of investment projects in cooperation with foreign partners. The complexity and ambiguity of the legal nature inherent to production sharing agreement in it’s modern structure is the main issue raised in this thesis. The purpose of the thesis is to form a definition, characterize the terms, legal regime and legal nature of the production sharing agreement and therefore recognize possibilities to increase investment prospects of the project for investors. The thesis considers various investments contracts used in subsurface area and specifically explores the production sharing agreement. The legal nature of the PSA was investigated. There was made an analysis of existence of public and civil law elements in the production sharing agreement as well as it’s similarity to contractual structures defined by the Russian Civil Law. The author has performed an assessment of the role of the production sharing agreement, made individual conclusions on it’s legal nature, prepared suggestions implying amendment of the current Russian legislation aimed at increasing of investment prospects of the projects implemented within the PSA.