{
  "id": "RL32087",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL32087",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 101738,
      "date": "2003-09-23",
      "retrieved": "2016-04-08T14:37:59.392544",
      "title": "Russian Oil and Gas Companies and Central and Eastern Europe",
      "summary": "The collapse of the Warsaw Pact in 1989, and of the Soviet Union itself in 1991, heralded a\nmajor\nreduction in Russian influence in Central and Eastern Europe during the 1990s. Russia's armed\nforces and the Russian economy went into steep decline. In recent years, one key sector of the\nRussian economy, the Russian oil and gas sector, has shown signs of revival. The Russian energy\nsector occupies a central place in Russia's economy and political system. In 2000, the energy sector\naccounted for 16% of Russia's GDP, 29% of the gross value of industrial output, 45%-48% of\nFederal budget revenues, and 54% of foreign exchange earnings. Its vast financial resources also\ntranslate into great political power, although this power is mitigated by infighting among Russian\nelite groups.\n  In the past few years, flush with cash from rising energy prices, Russian firms have tried to buy\nup energy companies in Central Europe, with mixed success. Officials and experts in Central Europe\nhave expressed worries about the political motives of these investments. They have expressed\nconcern that such Russian investment could have a negative impact on the sovereignty of these\ncountries, particularly given the non-transparent way in which these companies have operated and\ntheir close links with the Russian government. Some claim that Russian leaders are pushing to\ncontrol as much as possible while they still have substantial leverage, as opposed to 2004, when\nNATO and, especially, EU membership will change the political equation. They claim if Russian\nfirms controlled key resources, they could form stronger political client networks within their\ncountries, thereby compromising their sovereignty. \n  However, some analysts point out that in some cases, the actions of Russian firms appear to be\naffected by conflicts within the Russian elite. Moreover, there are limits to Russian firms' ability\nto gain influence in the region. They often face strong resistance from local governments fearing\nRussian dominance and wanting to protect local companies. Public opinion in these countries\nstrongly favors maintaining independence from Russia, including economic independence.\n  One way that the United States can help counter the possible negative consequences of the\nactivities of Russian energy firms is to raise the issue with Moscow and encourage the European\nUnion, which is the main player on the issue, to do likewise. The United States and its allies could\nalso encourage the participation of Western companies in the privatization of key firms in the region,\nwhich would foster transparency. The United States can help these countries by encouraging\ndiversification of their energy supplies. U.S. investment in Russian energy firms could also be\nhelpful. Investment could both give the United States a greater interest in the success of Russian\nenergy firms and positively influence the behavior of those firms in Central and Eastern Europe.\nHowever, Administration officials have also expressed frustration with Russia's slowness to create\nconditions for foreign investment. This report will be updated as events warrant.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
    }
  ],
  "topics": [
    "European Affairs",
    "Foreign Affairs"
  ]
}