This article is the second of two parts addressing the challenges facing Russia’s oil and gas industry. In Part 1, executives from Rosneft, Lukoil, and Gazprom Neft outlined the excessive taxes and duties that eat into operating expenses and obviate exploration efforts (OGJ, Mar. 9, 2009, p. 27). This article explains the actions the government is taking to address those problems and to encourage exploration and production. Click here to enlarge imageSince 2004, private Russian oil and gas companies’ exploration expenses, in nominal terms, increased 4.4 times, reaching 165 billion rubles in 2008 ($6.7 billion; Fig. 1). Despite this major inflation of costs—more than 30% ...