Russian foreign direct investment in Ukraine

---

ISSN 1795 - 5076

Electronic Publications of Pan-European Institute 7/2009

Russian foreign direct investment in Ukraine

Nataliya Blyakha

---

Russian foreign direct investment in Ukraine 

Nataliya Blyakha

1

 

 

7/2009 

 

Electronic Publications of 

Pan-European Institute 

 

www.tse.fi/pei

                                                 

1

 Research assistant, Pan-European Institute, Turku School of Economics. 

---

Nataliya Blyakha                                                                                       PEI Electronic Publications 7/2009 

www.tse.fi/pei 

 

 

CONTENTS 

 

1

 

INTRODUCTION 2

 

2

 

RUSSIAN-UKRAINIAN ECONOMIC RELATIONS 

3

 

3

 

RUSSIAN CAPITAL IN UKRAINE 

7

 

4

 

LEADING RUSSIAN COMPANIES OPERATING IN UKRAINE 

9

 

4.1

 

Oil processing industry of Ukraine 

9

 

4.2

 

Telecommunication sector 

16

 

4.3

 

Financial sector 

19

 

5

 

RUSSIAN INVESTMENTS IN RETAIL, CONSTRUCTION AND 

        MANUFACTURING 

21

 

6

 

CONCLUSIONS 23

 

REFERENCES 25

 

 

 

 

FIGURES 

 

FIGURE 1  UKRAINE'S MAIN EXPORT AND IMPORT PARTNERS IN 2008 3 

FIGURE 2  UKRAINE'S FOREIGN TRADE WITH RUSSIA DURING 2004-2008 4 

FIGURE 3  RUSSIAN DIRECT INVESTMENTS IN UKRAINE DURING 1995-2008 6 

FIGURE 4  RUSSIAN DIRECT INVESTMENTS IN UKRAINE BY INDUSTRY IN 2008 8 

FIGURE 5  SHARE OF THE UKRAINIAN OIL-REFINING PLANTS IN TOTAL AMOUNT 

             OF OIL PROCESSED, 2008 13 

FIGURE 6 

 

16 

MAJOR MOBILE OPERATORS IN UKRAINE’S TELECOMMUNICATIONS 

             MARKET

 

TABLES 

 

TABLE 1 

FDI INFLOW IN UKRAINE BY INVESTING COUNTRIES IN 2008 5 

TABLE 2 

THE SHARE OF RUSSIAN CAPITAL IN UKRAINIAN INDUSTRIES IN 2007 7 

TABLE 3 

THE OIL REFINERIES OF UKRAINE, THEIR CAPACITY AND USAGE 

             IN 2002-2006 9 

TABLE 4 

PRINCIPAL SHAREHOLDERS OF THE UKRAINIAN OIL REFINERIES 10 

TABLE 5 

MAJOR SHAREHOLDERS OF TNK BP 12 

TABLE 6 

PRINCIPAL INVESTMENT PROJECTS, IMPLEMENTED AT THE LISICHANSK 

             OIL REFINERY 13 

TABLE 7 

PRINCIPAL INVESTMENT PROJECTS, IMPLEMENTED AT THE ODESSA 

             OIL REFINERY 14 

TABLE 8 

CIS AND OFF-SHORE OWNED BANKS, AS OF 30 SEPTEMBER 2008 20 

1 

---

Nataliya Blyakha                                                                                       PEI Electronic Publications 7/2009 

www.tse.fi/pei 

 

 

1 Introduction 

The economic relations between the Russian Federation and the Ukraine are an 

important component of growth of the both countries. Russia has always been among 

main strategic trade partners for Ukraine with high influence on Ukrainian business 

development. Russian investments in Ukraine play more significant role as it is stated 

in official sources and Russian companies that operate in Ukraine have become 

influential political and business actors in Ukraine’s economy. 

The aim of this paper is to bring out main characteristics of Russian foreign direct 

investment in Ukraine and focus on industrial and companies’ aspect of investments. 

The analysis of Russian companies that are operating in Ukraine is not an easy task, 

for several reasons. First and foremost, many Russian firms are unwilling to disclose 

information about their activities. Sometimes even defining major shareholders or 

assets of the company is a complex task. A second reason for difficulty is that the topic 

of outward foreign direct investments from Russia has been so far under-researched by 

academic community. There have been some research done about Russian TNCs

2

, 

but they all have been studied on general level and when it comes to specific country 

or impact of operations, information is very limited. 

The current paper attempts to provide an overview of Russian foreign direct 

investments in Ukraine, through discussing the industries where the Russian 

investments are mostly accumulated. First, an overview of the current trade and the 

investment climate of Russia-Ukraine relationships is specified. The third chapter 

describes presence of the Russian financial groups in the main Ukrainian segments. In 

the following chapters the Russian investments in Ukraine are analyzed through the 

company cases with an impact on their activities, the structure and objects of their 

investments.  

                                                 

2

 The reader is recommended to familiarize themselves with previous reports of the Pan-

European Institute (Vahtra 2007; Kuznetsov 2007; Liuhto and Vahtra 2007; Vahtra 2006; Vahtra 

2005). 

2 

---