Assessment of the Participation of Foreign Capital in the Russian Energy Sector
https://doi.org/10.26794/2587-5671-2025-29-5-188-199
Abstract
The increased sanctions pressure on Russia in recent years has significantly altered the current situation and economic landscape in the energy sector, increasing the risks to the stability of companies with foreign capital involvement. Due to the significant importance of the energy sector to the Russian economy, it is essential to examine the structure of its funding sources. The purpose of this study is to analyze the extent of foreign capital investment in the Russian energy sector by examining its dynamics and structural changes. We will examine the main owners in the sector and focus on the share of foreign investment in 2023 compared to 2021 for key industries such as electric power, coal mining, oil production, natural gas extraction, and uranium mining. Sanctions risks are also analyzed in the report. The findings show that, despite the years of sanctions, foreign investment continued to flow into the Russian economy. Since 2022, domestic businesses have not shown a significant decline in interest in offshore jurisdictions, and foreign multinationals still own assets in the Russian energy sector. The share of foreign capital in the electricity industry is 44%, coal mining — 38%, oil production — 40%, gas production — 19%. Sanctions risks for the energy sector have been identified due to the presence of foreign investors in companies’ capital. However, despite the apparent feasibility of transferring these companies to Russian jurisdiction, processes of redomiciling Russian businesses within the country are currently not actively developing. In the context of the transformation of the global energy landscape and the reorientation of Russian companies towards new markets, it is crucial to develop mechanisms for redomiciling, explore new investment strategies, and create favorable conditions for investors in the Russian energy industry.
Keywords
foreign investment,
foreign capital,
redomiciliation,
ownership structure,
energy,
energy sector,
sanctions risks
JEL: F10
About the Authors
A. V. Vavilina
Peoples’ Friendship University of Russia (RUDN University)
Russian Federation
Russian Federation
Alla V. Vavilina — Cand. Sci. (Econ.), Head of the Department of Management, Faculty of Economics
Moscow
A. A. Firsova
Peoples’ Friendship University of Russia (RUDN University);
Saratov National Research State University named after N. G. Chernyshevsky
Russian Federation
Russian Federation
Anna A. Firsova — Dr. Sci. (Econ.), Prof., Prof. of the Department of Management, Faculty of Economics, RUDN University; Prof. of the Department of Finance and Credit, Saratov National Research State University named after N. G. Chernyshevsky
Moscow, Saratov
Т. V. Komarova
Peoples’ Friendship University of Russia (RUDN University)
Russian Federation
Russian Federation
Tatiana V. Komarova — Senior Lecturer, Department of Management, Faculty of Economics
Moscow
References
1. Kiryukhina D.S. Features of the analysis of foreign investments in the oil and gas sector. Chelovek. Sotsium. Obshchestvo. 2021;(4):34–38. (In Russ.).
2. Beilin I.L. Investments in fixed capital of the oil and gas region as an indicator of its readiness for the financial embargo and transformation of the global energy balance. Finance: Theory and Practice. 2024;28(3):157–173. DOI: 10.26794/2587–5671–2024–28–3–157–173
3. ZakharovaA.A.Foreign investment in the economy of the Russian Federation. Dynamics of FDI inflows into the economy of the Russian Federation over the past decade. In: Actual problems and prospects for the development of the consumer market. Proc. 11th All-Russ. sci.-pract. conf. of students and pupils with int. particip. (Perm, December 5–14, 2022). Vol. 2. Perm: Perm Institute (branch) of the Plekhanov Russian University of Economics; 2022:147–151. (In Russ.).
4. Martemyanov I.A. Foreign investments in the real sector of the domestic economy. Prikladnye ekonomicheskie issledovaniya = Applied Economic Research. 2020;(6):27–34. (In Russ.).
5. Wang Q. Investment attractiveness of the Russian energy sector for foreign investors: Assessment and recommendations. Ekonomicheskie strategii = Economic Strategies. 2022;24(4):106–112. (In Russ.). DOI: 10.33917/es-4.184.2022.106–112
6. Sinitsyn M.V. Foreign investment in Russia’s electric power industry. Studies on Russian Economic Development. 2012;23(5):527–533. (In Russ.: Problemy prognozirovaniya. 2012;(5):141–150. URL: https://cyberleninka.ru/article/n/inostrannye-investitsii-v-rossiyskuyu-elektroenergetiku (accessed on 30.08.2024).
7. Yudina O.N.Russia-EU energy dialogue in 2000–2014: Key priorities, stages, contradictions, and outcomes. Vestnik Moskovskogo universiteta. Seriya 25: Mezhdunarodnye otnosheniya i mirovaya politika = Lomonosov World Politics Journal. 2022;14(2):40–75. (In Russ.). DOI: 10.48015/2076–7404–2022–14–2–40–75
8. Ermakova N.M. Attracting foreign investments into oil and gas industry of the Russian Federation. Problemy rynochnoi ekonomiki = Market Economy Problems. 2019;(1):37–43. (In Russ.). DOI: 10.33051/2500–2325–2019–1–37–43
9. MoiseevV.V. State policy of economic development of modern Russia (2000–2023). 2nd ed. Moscow: Direct-Media; 2023. 564 p. (In Russ.).
10. Borovskii Yu.V. Russia and the EU: A trend change in energy relations. Rossiiskii sotsial’no-gumanitarnyi zhurnal = Russian Social and Humanitarian Journal. 2023;(3):1. (In Russ.). DOI: 10.18384/2224–0209–2023–3–1323
11. Kryuchkova L.S.Impact of foreign direct investment on the economy of Russia. Akademicheskii vestnik Rostovskogo filiala Rossiiskoi tamozhennoi akademii = Academic Bulletin of the Russian Customs Academy. Rostov Branch. 2021;(4):36–42. (In Russ.).
12. Mitrofanova T.Yu., Mitrofanov N.M.Russia in the global system of the division of labor. History of the globalization of the Russian economy. Finansy i uchetnaya politika = Finance and Accounting Policy. 2023;(3):22–27. (In Russ.).
13. Spartak A.N., Cheklina T.N.Russia’s trade and economic cooperation with Europe before and after the start of the special military operation. Rossiiskii vneshneekonomicheskii vestnik = Russian Foreign Economic Journal. 2023;(2):8–46. (In Russ.). DOI: 10.24412/2072–8042–2023–2–8–46
14. Tsypin A.P., Ovsyannikov V.A. Assessing the share of foreign capital in Russian retail chains. In: Innovative development of the Russian economy. Proc. 9th Int. sci.-pract. conf. (Moscow, October 25–28, 2016). Vol. 2. Moscow: Plekhanov Russian University of Economics; 2016:295–297. (In Russ.).
15. Tsypin A.P., Ovsyannikov V.A.Assessment of the share of foreign capital in Russian industry. Molodoi uchenyi = Young Scientist. 2014;(12):195–198. (In Russ.).
16. Petrenko I.E.Russia’s coal industry performance for January-December, 2021. Ugol’. 2022;(3):9–23. (In Russ.). DOI: 10.18796/0041–5790–2022–3–9–23
17. Chupin A.L., Zasko V.N., Morkovkin D.E., Dontsova O.I. Model of growth of the region’s economy based on the index of economic complexity. Finance: Theory and Practice. 2024;28(3):52–60. DOI: 10.26794/2587–5671–2024–28–3–52–60
Review
For citations:
Vavilina A.V., Firsova A.A., Komarova Т.V. Assessment of the Participation of Foreign Capital in the Russian Energy Sector. Finance: Theory and Practice. 2025;29(5):188-199. (In Russ.) https://doi.org/10.26794/2587-5671-2025-29-5-188-199
Views:
16
Email this article 