DUMA PASSES LAW ON PRODUCTION SHARING.

The Duma yesterday passed a compromise version of a production-sharing law worked out by a reconciliation committee. The law is expected to boost investment in Russia’s raw materials sector, primarily the oil and gas industry. The law was passed by 242 votes, with 27 votes against and 15 abstentions. (10)

The new bill probably is coming too late to change the calculations of most Western investors. In theory, the law (which covers oil, diamonds, aluminum, and other minerals) guarantees foreigners access to Russia’s mineral wealth. Because of the absence of production sharing legislation immune to government meddling, Western oil firms alone have declined to proceed with contracts estimated to be worth up to $20 billion. But most are now glad they abstained, given signs of increasing political instability, the prospect of a new Duma dominated by communists and extreme nationalists, and some sorry lessons learned from dealing with greedy local partners and corrupt pipeline operators.

Latvian Left Fails to Form Government.