The monopoly structure of oil and gas production, distribution, refining, and marketing which was in operation during the Soviet period was largely dismantled between 1990 and 1993. The oil and gas industry has been opened up through privatisation, the establishment of state-owned corporations operating in the world market, and joint ventures with foreign companies.
Since November 1992, when Roskomnedra (Russia's Committee for Geology and Use of the Subsoil) began granting exploration and production rights, around 1,220 oil and gas licences have been awarded. At the same time around 350 new-field development and exploration licences have been awarded through 49 tender bids - 120 have been granted to enterprises with foreign capital. By the end of 1994, Russia is expected to have launched a series of exploration and production tenders in Western Siberia, the European North, the Volga-Urals and Far East regions, including the Barents and Sakhalin shelves.
The Komi Region in the Russian Arctic is a major focus of oil industry activity. The region is remote and has a history of being a semi-autonomous gulag region of Russia, largely closed to outside scrutiny. However, such regions are favoured by the oil industry around the world. The oil industry operating in Alaska (mainly BP) has a history of broken promises, neglect and pollution that break federal and state laws many times each year. In Nigeria, Shell take advantage of the Nigerian dictatorship and operate to standards which would be illegal anywhere in the west. In the Amazon (Ecuador), Texaco's exploration caused 70 percent malnutrition in children aged 6-12 in areas around oil drilling operations in the Amazon's Oriente region, and 98% malnutrition in the most contaminated areas. Residents of the region are currently suing Texaco. Amoco, before it pulled out of Burma, was directly funding its military Junta, and it enjoyed full military protection to ensure access to oil and gas.
The main new Russian corporations founded in this region during this period are Archangelskgeologiya (geological exploration), Komineft (oil production), Archangelskneftegaz (oil and gas production), and TransNeft (oil and gas distribution).
In order to sustain present production levels (7million barrels per day - mbbl/d) the Russian oil sector is estimated to need US$5bn in investment between now and the year 2000. The Russian concern to attract foreign capital investment while maintaining a measure of domestic control over resource industries has meant that the joint venture is the main form of enterprise for utilising western capital in oil production (see figure 1). KomiNeft and Archangelskgeologiya are partners in the main joint ventures in the region, while Transneft is attempting to establish arrangements for the construction of a major new pipeline from the Komi region to Finnish refineries.