St Petersburg: Western investors are jostling with each other for position in Russia in anticipation of the moment when sanctions imposed over the Ukraine crisis are softened and they can do lucrative business again.
Most are not yet coming with money and specific deals — at least, not in the same numbers as before the crisis — so the objective instead is to win favour with the Kremlin by being the first to turn back toward Russia.
"Look how many American investors are here, not to mention the Europeans," Sergei Chemezov, head of the state conglomerate Rostec, said at Russia's biggest annual investor show this week, held in St Petersburg.
"They understand that we have an enormous market. And whoever comes here first, they get all the spoils," said Chemezov, who used to work with President Vladimir Putin in the Soviet foreign intelligence service.
Two years ago, the United States and the European Union imposed sanctions on Moscow over its annexation of Ukraine's Crimea region and its support for a separatist rebellion in eastern Ukraine.
Western governments say in public that the sanctions will not be eased until an internationally brokered peace deal on eastern Ukraine, the Minsk agreement, is fully implemented.
But many diplomats say in private that that deal can never be implemented - not only through Russia's fault but also because the conflict is intractable. At the same time, European economies are stagnating, leaving businesses anxious to get back into the lucrative Russian market.
Pressure has therefore been building inside Europe, according to officials with EU member states, for governments to move beyond the Ukraine impasse and lift some of the sanctions, perhaps within the next 12 months.
"I think the politicians do listen to business. The politicians have to find their solution," Rainer Seele, chief executive of Austrian energy company OMV, told Reuters.
Guest of honour
Italy had the coveted status of guest of honour at the forum in St Petersburg, where investors vie to catch Putin's eye.
Italian Prime Minister Matteo Renzi was the only head of an EU government to attend apart from the prime minister of Malta.
Italy also had the most lavish pavilion of any foreign country at the forum, a large hall whose interior was decorated to resemble an Italian palazzo.
Italian Economic Development Minister Carlo Calenda said Rome would like to take on the role of building bridges with Russia on behalf of the rest of Europe, and Renzi echoed the sentiment when he took the stage alongside Putin during the forum. "It's a logic of bridges, not walls," he said.
Calenda said the two countries had a pipeline of 340 proposed investments, in areas from leather goods to agriculture, that they would work to realise over the next few months.
Italy did not have the field to itself, however.
"There are a lot of French people here," said an executive at a major Russian company at the St Petersburg forum. "Probably we can interpret this as a signal."
Patrick Pouyanne, chief executive of French oil major Total , said France had maintained the highest rate of investment in Russia among all Western countries during sanctions.
He said there was political rapprochement in the air, in part because France and Russia had learned to work together over the conflict in Syria.
"The forum is clearly more active this year. I'm meeting more people this year," he said. "People are adapting."
"Sanctions aren't forever"
To be sure, Western investments in Russia are still far from being back to normal.
Several of the biggest Russian companies are subject to targeted sanctions, forcing their Western business partners to put joint projects on hold, while the financial sanctions bar many forms of lending to Russia.
Even in areas not covered by sanctions, fear of a worsening in political tensions and the hostile atmosphere over Ukraine are still keeping many investors away.
A slate of deals were unveiled at the forum, but none on the scale seen at the event in years before the sanctions.
"The mood has improved but the facts aren't there," said Vadim Shvetsov, majority owner of Russian automotive company Sollers.
He said for investors to return, it would take higher world prices for oil and gas, Russia's biggest export, and a change in the Western rhetoric towards Russia.
Still, other people at the forum said Western investors were looking ahead to the future.
"Sanctions aren't forever," said Russian Deputy Energy Minister Alexei Texler.
In an interview with Reuters, Pavel Grachev, chief executive of Russia's largest gold producer Polyus, said investors were coming back partly because Russia was dialling down the tension in political relations with the West.
But there was another reason.
"Given that profitability is being squeezed on Western markets, investors are coming here looking for ideas, for profits, whether it's in shares or bonds," Grachev said.
"Not for the first time, greed — in the positive sense of the word — is trumping caution."