Russia is a large country stretching across Asia and Europe. It possesses a phenomenal wealth in the form of natural resources, a large skilled workforce, technology and a mammoth population. All these is evident from the fact that the foreign investment in Russia will be a stupendous $60-$70 billion in the next two to three years, and that too alone through FDI.
Among the 178 countries surveyed for the best to do business, Russia ranked 106th above that of Brazil and India, this is mostly because of the realization of the Russian government of the importance of market economy and foreign trade and investment. It has opened up several sectors and is now on the path of development.
Russia is encouraging the participation of foreign investors especially in the energy sector. The reason behind this is the energy sector is the vital sector in the entire Russian economy as it accelerates the growth of all the other sectors of the economy and serves as the major source of foreign exchange for the country.
Why to invest in the energy sector of Russia
The reasons for investing in the energy sector of Russia are plenty. The aspirations to become the energy superpower and to adopt a free market economy have made Russia a favorite destination to invest in, especially in the energy sector.
Third largest producer and consumer
First, it is the third largest producer as well as the consumer of energy in the world only third to US and China. Russia produces 53.3 quadrillion Btu of energy whereas it consumes six percent of the total world consumption. Russia is the largest producer of natural gas in the world, producing a mammoth 35 percent of the total world production.
Encouragement from the government
The government of Russia is now playing a role of regulator and provider of an atmosphere which will suit the foreign investors by adopting efficient regulation without deterring the foreign investors and by implementing profit sensitive taxation policies.
Opportunities in all the domains of the energy sector
There is a lot of space for investment in the oil and gas sector. Many foreign investors are competing to explore Russia’s gas and oil reserves. There are loads of proposed reforms in the power sector such as breaking up the vertical integration in the power sector.
Russia has also opened the doors to use western technology, to expand its energy sector. It has also shifted its focus on utilizing effective management techniques, which will boost the overall production in the energy sector.
Opportunities for renewable energy resources
Russia is on the verge of a revolution in the arena of strong renewable energy industry. A lot of legislative developments have also taken place in Russia in this regard.
The current economic recession has opened doors for implementation and creation of new methods towards development in the energy sector of Russia. The desire to become the world super power in energy coupled with a political will has made Russia one of the most favored destinations in terms of attracting foreign investment.