He did not elaborate on the objections from the FSB, one of the successors of the Soviet Union’s KGB, and said the draft law would be debated again in a month. The idea to limit foreign participation in sectors from oil and gas to metals and mining was raised by President Vladimir Putin — himself a former KGB spy — and Russian ministries have been working on the draft since 2005.

The Kremlin has substantially strengthened its grip over strategic industries in the past years by putting pressure on foreign firms via its technical, environmental or tax agencies.

As a result, talks on potential foreign-led projects in Russia have virtually died down, although the country still has in place a few such deals that were signed in the mid-1990s.

The existing arrangements would not be affected by the new legislation. “Even though the proposed restrictions on developing strategic fields seem severe, they leave enough room for future foreign investment in Russia, where most new oil and gas fields would be below the reserve cap,” said Valery Nesterov, an analyst at Troika Dialog brokerage.

The latest draft was prepared by the energy ministry and proposes limiting the involvement of foreign-led firms in the military equipment, nuclear, aircraft and other sectors. It will also restrict their access to the markets of natural monopolies and their involvement in developing strategic deposits, although government officials have long debated which fields should be designated as strategic.

-Reuters