Reports. In-depth reports on the risk factors and threat implications of economic and financial statecraft.

Romania benefits from a more entrenched view among the mainstream political parties and, accordingly, the voting public that the country ought to be aligned firmly with the EU and NATO and resist efforts by Russia to impose its will on the country through assorted means, including energy leverage as well as other economic and financial strategies. In general, there appears to be a level of skepticism towards Russian activity in the country that is not present in a number of other Central and East European countries.

That said, the country has not been able to resist or at least prevent a significant flow of Russian capital into the country, including via the business transactions of stateowned enterprises and, in particular, by the private entities of Russian oligarchs that have concentrated especially on the countrys metals and mining industry. Moreover, although the flow of trade on an annual basis is not at the same level as certain other countries in the region, many of the Russian-owned assets in the country have been in place for years, dating to earlier merger and acquisition activity that took advantage of irresponsible privatization schemes undertaken by earlier governments.

Excerpted Deals and Transactions:

• Romania is relatively free of any undue dependency on Russia for gas, unlike many of its neighbors. Nevertheless, its production is decreasing and new investments are being made in the exploration and development of potentially rich new sources of supply. Its offshore natural gas reserves are believed to be significant, enough to make the country energy independent by 2020 and perhaps even an energy exporter through the use of new interconnectors with neighboring countries. These new discoveries and the countrys interconnectors represent a threat to Russias position in the region as the dominant and, for some countries, only supplier of natural gas. Moscow can be expected to wage a serious E&F campaign against this offshore development effort.

• Just as is the case with regard to Bulgarias offshore assets, it is worth watching for potential conflict in the Black Sea region that implicates the offshore drilling rigs of Romania (and other countries) due to the strategic significance of recent discoveries and the controversy that comes with viewing floating assets as pieces of sovereign national territory that need to be defended. Moreover, two of Romanias offshore concessions were granted to Lukoil in 2010 and 2011, creating a potentially competitive offshore environment.

• VTB Bank has had extensive operations in Romania since the early 2000s, signing cooperation agreements and attempting to purchase key assets through its venture capital arm, VTB Capital. In addition to its presence in Romania serving the traditional role of facilitating Russian activity in the country with less scrutiny than might be the case if forced to work through a local or Western branch, VTB has been involved in bidding and actually procuring media companies as well as manufacturing plants, among other assets in the country.

• Russian heavyweights involved in Romanias metals and mining industry include: Oleg Deripaska (President of RUSAL); Igor Zyuzin (owner of Mechel); and Vitaliy Machitski (head of Vimetco). Although these individuals have, in some cases, been exiting the country for what appear to be economic reasons, those maneuvers have involved still additional players with opaque backgrounds (and some with reported connections to Russian intelligence).

• Vitaliy Machitski, through his control of Vimetco, owns the Romanian company, Alro, which holds the largest producer of aluminum in all of Central and Eastern Europe and one of the largest companies in Romania.

• In addition to its drilling concessions in the Black Sea, Lukoil also controls the Petrotel Ploiesti refinery, one of the largest and most technologically advanced refineries in Romania. The refinery provides fuel for some 300 filling stations and controls some 20% of Romanias market for petroleum products.