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The Arctic: a new state priority

The Arctic: a new state priority

The Arctic is gradually turning into one of the main economic stakes of Russian state authorities. It is not just a geographical priority of development. It is already the core of a new Keynesian project.

The Arctic is supposed to ensure substantial cargo traffic in the Northern Sea Route and to create demand for products of Russian engineering industries and new jobs. Meanwhile, production of hydrocarbons is actually the only feasible project in the Arctic. Oil and gas companies feel that President Vladimir Putin is interested in this region, and they deliberately ignite his interest.

Thus, not profitability and real payback of such projects are important, but their contribution to maintaining economic growth of the country. This is the reason for the progressing Arctic gigantomania.

The process began, to a great extent, with the Yamal LNG project that was awarded not only tax exemptions but also state investments in the infrastructure. It not only gave rise to development of an LNG cluster in Yamal and Gydan but also became the sample of successful lobbyism that other companies desire to achieve. In large part, this venture inspired the Vostok Oil project that was the hit of 2020. Though, that’s not everything.

There are debates about development of gas chemicals and even hydrogen production in the Arctic.

The reshuffle of ministers and drafting of different Arctic development programs were also aimed at fulfilling Arctic ambitions.

Corporations need to shift their expenses onto the state, and their proteges with corresponding tasks infiltrate ministries and departments.

The question is whether this Arctic story is not going to bury state resources in permafrost

The new report by the Fund elaborates on the following issues:

  • Companies that have managed to include their aspirations into strategic documents on Arctic development and, consequently, turned their corporate tasks into national ones
  • Changes in the bureaucratic layout around the Arctic following the autumn reshuffle in the government
  • The new system of state administration of the region and its key functionaries
  • Prospects of LNG production in the Arctic
  • Prospects of large-scale oil production in the Arctic, and whether nonresidents will join such projects
  • The cost of Arctic shipbuilding development and how successfully it progresses
  • Who controls marine traffic in the Northern Sea Route, and will the NSR be able to become the new Suez Canal?

Contentes of the report:

INTRODUCTION 3
1. STATE PROGRAMS OF THE ARCTIC REGION DEVELOPMENT: WHERE AND WHO CAN BE DISCERNED 5
2. THE STATE SYSTEM REGULATING DEVELOPMENT OF THE ARCTIC 19
2.1. November reshuffle in the government, supervision of the Arctic 19
2.2. Arctic Deputy PM Trutnev: a multitasking lobbyist 28
3. MAIN OIL AND GAS PROJECTS IN THE ARCTIC 34
3.1. LNG projects of NOVATEK 34
3.2. Vostok Oil: new flagship project of Rosneft 43
4. BATTLES OF ELITES FOR INFLUENCE ON THE TRANSPORT SEGMENT IN THE ARCTIC 54
4.1. Conflicts around contracts on Arctic ships 54
4.2. Regulation of the Northern Sea Route 59
CONCLUSION 62
Date of release: December 29, 2020

If you are interested to obtain please contact » Elena Kim

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Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07
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