Russia’s lower house of parliament on Wednesday approved a draft law restricting foreigners from holding subsoil licences, according to the parliament’s website.
The law may help safeguard new projects from foreign companies leaving Russia as it may effectively bar foreign companies from returning, an unnamed source told the Vedomosti newspaper last month.
Oil majors including ExxonMobil, BP and Shell as well as Canadian miner Kinross Gold Corp have announced plans to leave Russia following the start of what Moscow dubs its “special military operation” in Ukraine.
The amendments to the “subsoil” law stipulate that foreigners will have to set up a new corporate entity in line with Russian law in order to continue their development of minerals.
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The draft law says that foreign owners will have to pass their licences to Russian corporate entities within 30 days after the law comes into force.
If the foreign owner fails to comply with the regulations, the ownership of the licence will be revoked.
Russia, a top global producer of oil and gas, has already imposed some restrictions on foreign ownership in large mineral fields, which it deems “strategic”.
Russia needs modern technologies and Western expertise to tap its mineral riches.
Its natural gas reserves may last more than 100 years, while its oil deposits are seen lasting around 60 years under the current rate of use.
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