New guidelines are being prepared to boost foreign investment in Russia's energy sector, closing loopholes on who is responsible for what and helping to eliminate doubts about the fate of production-sharing deals.


Mikhail Klubnichkin, tax adviser to the Fuel and Energy Ministry, said the ministry had prepared a package of measures in line with a decree signed by President Boris Yeltsin in December 1993.


The documents would probably be submitted to the government for approval in September, he said.


"They will fill the existing legislative vacuum on production-sharing agreements," said Klubnichkin, who is also department head at Russia's Price Research Institute.


The documents -- over 100 pages -- would define procedures for negotiating production-sharing deals and regulating the tax regime for foreign investors.


They would also determine who in the government decides what on production-sharing agreements, Klubnichkin said.


"So far this question remains unclear, and the new document will clearly say who will represent our country during talks on production-sharing deals," he said by telephone.


A number of international deals, including the big Sakhalin-2 project in the Russian Far East, have been held up amid uncertainty about production-sharing.


"This agreement will not be implemented before government resolutions and amendments to the existing legislation are adopted," Klubnichkin said. "I think everything will be settled by the beginning of next year."


The deal, the first production-sharing accord of its kind, involves five major Western oil firms. It was formally signed last week.


Klubnichkin said the new regulations would come into force after the adoption of a law on production-sharing due this autumn, and the adoption of amendments to existing tax laws.


"The nature of the production-sharing agreements is that there should be no tax burden and that, in return, Russia should keep part of the production," he said. "But these provisions are not provided for in current legislation."


One of the documents said foreign investors involved in production-sharing deals would only face federal taxes outlined in the agreements. They would be freed from other taxes, including any levied afterwards.