"This is a thoroughly thought-out decision aimed at enhancing the efficiency of exploration and production," Dmitry Medvedev said.
The law on strategic sectors, already approved by parliament, limits foreign participation in developing Russia's biggest oil and gas reserves. It gives the right to develop Russia's offshore reserves to companies with five years' experience in the area and in which the state owns at least a 50% stake, leaving only minor roles in hydrocarbon projects for foreign investors and independent producers.
Russian state-controlled giants Gazprom and Rosneft are likely to receive monopoly rights to all oil and gas field development on the Russian shelf.
"The continental shelf is our national asset, and this is a special law, setting out special procedures," Medvedev said.
Medvedev has put Deputy Prime Minister Igor Sechin, head of oil giant Rosneft's board of directors, in charge of offshore hydrocarbon development.
Rosneft chief Sergei Bogdanchikov earlier said Russia needs 61 trillion rubles ($2.6 trillion) of investment to develop offshore oil and gas deposits.
Earlier this month, Prime Minister Vladimir Putin voiced concern over the oil and gas industry, saying it has almost exhausted its potential for growth, threatening the country's export obligations. He called for a major technological overhaul in the sector, as well as more exploration to find new strategic deposits.
Along with its already vast offshore reserves, Russia also claims a large swathe of the Arctic shelf, believed to be rich in oil and gas, but has still to substantiate the claim.
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