Russia

Russia’s Arctic territory stretches along 24,140 kilometres of coastline along the Arctic Ocean and waters above the Arctic Circle from the Barents Sea in the west at the border to Norway to the Bering Sea and the Sea of Okhotsk in the far east. Russia’s coastline accounts for 53 percent of Arctic Ocean coastline and covers the Barents Sea, Kara Sea, Laptev Sea, and East Siberian Sea. Throughout the country’s Arctic waters a number of archipelagos can be found, most prominently the Novaya Zemlya in the Kara Sea, Severnaya Zemlya in the Laptev Sea, and the New Siberian Islands in the East Siberian Sea. To the north-east of the Norwegian archipelago of Svalbard, Russia’s Franz Josef Land is located just 950 kilometre from the North Pole. Russia’s closest point to the North Pole is Cape Fligely on Rudolf Island. The Cape is a mere 911 kilometres from the pole.

Russia’s Arctic territory is dominated by three major river systems, the Yenisey River in the west discharges in the Kara Sea, the Lena River empties in the Laptev Sea, and the Kolyma River ends in the East Siberian Sea. While these rivers are frozen for parts of the year, they represent a vital transportation route for parts of the year, aided in part by a specialised fleet of shallow-draft ice breakers to ensure access to communities and cities along these rivers.

Temperatures across Russia’s Arctic and sub-Arctic territory are the coldest recorded outside of Antarctica. The village of Oymyakon in the Yakutsk region, regularly sees temperatures below -50°C and recorded a record low -71.2°C in 1924. Daily average low temperatures during winter, while inevitably varying across such large swath of land, range from –20°C –40°C. During the summer month average daily high temperatures are between 15-25 °C but can reach as high as 35°C especially in Russia’s sub-Arctic interior regions. In the summer of 2018, the Russian Northern coastal regions also experienced an unprecedented heat wave with temperatures exceeding 30°C.

Russia’s Arctic population counts approximately 2 million people, about half of the people living in the Arctic worldwide. Russia’s largest cities above the Arctic Circle are Murmansk, also the Arctic’s most populous city and historically known as an Arctic hub, with a population of 303,754. Norilsk has 175,365 inhabitants and Vorkuta counts 70,548 people. However, in the recent census of 2017, the Murmansk Oblast population was in clear decline. Since 2010, the population has decreased by nearly 40,000 people over the last 7 years. Russia counts over 100 identified ethnic groups, of which 41 are legally recognised as Indigenous small-numbered peoples of the North, Siberia, and the Far East. Of the 41 people, 11 reside around or above the Arctic Circle. Lovozero in Murmansk oblast is considered the Russian “Sami capital,” with 2,800 inhabitants.

Russia’s Arctic is home to approximately 67,000 people that are part of indigenous minorities, of which 75 percent live in rural areas. The largest indigenous groups in Russia are the Dolgan, Nganasan, Nenets, Saami, Khanty, Chukchi, Evenk, Even, Enets, Eskimo (or Yupik), and Yukagir. While traditional livelihood opportunities vary from region to region, the lives of all of Russia’s Arctic people are closely intertwined to the long history of exploitation of resources in Russia’s North, which contains vast quantities of natural resources, including oil and gas, coal, timber, and various minerals.

Resource exploration often occurs on or in proximity to the traditional homelands of indigenous peoples. While the impact of and the adjustment to industrialization varies from region to region, large swaths of land and rivers used for reindeer herding, fishing, and hunting have been lost to or been degraded by industrial development. In the process traditional knowledge has been lost and century-old pattern of land use have been ignored bringing with it high social cost and the deterioration of traditional culture. While economic development in the Arctic accounts for a growing share of Russia’ gross national product, it remains difficult for indigenous people to take advantage of higher education opportunities of benefit directly or indirectly from the economic opportunities related to the industrialization of the north. In addition, the melting of the tundra permafrost has caused outbreaks of deadly anthrax and a series of violent explosions in the Russian Arctic. This constitutes a serious danger for both reindeer, ecosystem and Arctic inhabitants. In 2017, a boy died of anthrax in the Yamal Peninsula, while 20 infected people were treated and survived. Temperatures reaching over 30°C in intense heat waves across Siberia led to the melting of the permafrost.

The Russian economy is dominated by extraction of natural resources, primarily oil and natural gas. The country is the world’s third-largest producer of hydrocarbon resources and more than 50 percent of Russia’s federal budget depends on revenue derived from oil and gas production. Russia’s Arctic and sub-Arctic regions account for 90 percent of Russia’s natural gas production and 10 percent of its oil production. However, in recent years, Russia has hit a record high in natural gas production records. A total of 3.5 billion rubles were invested in the Russian energy sector in 2017, 10 percent more than previous years. Natural gas production in 2017 therefore amounted to the highest volume in 17 years, while exports also peaked. The new Bovanenkovo field in the Yamal Peninsula will produce a record-high 115 billion cubic meters by 2020.

History of Oil and Gas in Russia’s Arctic

The exploitation of oil and gas in the Russian Arctic dates back to the early 1930s. In 1930, the Arctic’s first oil field, Chibyuskoe, was discovered in the Republic of Komi followed by the Yarega oil fields in 1932. Some of Russia’s largest oil and gas fields, which are still in production today, were discovered during geological prospecting in the 1960s and 1970s. Development focused on the West Siberian oil and gas province, and more specifically the Arctic part of the province known as Yamalo-Nenets Autonomous Okrug (YaNAO). A number of giant natural gas fields surpassing any previously known has fields in scope and size were discovered in YaNOA starting with the Tazovskoe field in 192, followed by the Novoportovskoe oil and gas condensate field in 1964, the Gubkinskoe oil and gas condensate field and the Zapolyarnoe gas field in 1965, the Urengoy oil and gas condensate field in 1966, the Medvezhye gas field in 1967 and the Russkoe oil field in 1968.

Additional developments followed in the 1970s and 1980s in the northeastern part of the West Siberian oil and gas province along the lower reaches of the Yenisei River with the discovery of the Vankor, Tagul, Lodochnoe, and Suzun fields.

During the 1970s and 1980s development followed on the Yamal peninsula with the discoveries of the Bovanenkovskoe gas field in 1971, the Kharasavey and South Tambey fields in 1974, and the Rostovtsev oil and gas field in 1986. To this day YaNAO part of the West Siberian oil and gas province remains the largest gas producing region of the world and also provides substantial share of Russia’s oil production.

In 2010, Norway and Russia resolved a 44-year dispute over the border delineation in the Barents Sea. The countries agreed to split the 175,000 square kilometre area under dispute which may contain up to 4 billion barrels of oil and 878 trillion cubic feet of natural gas. The implementation of Western sanctions by the United States and the European Union against Russia impact the exploration and development of hydrocarbon resources in the Arctic. ExxonMobil signed cooperation agreement with Rosneft for a total of 10 joint ventures, primarily exploration in the Kara and Black Seas as well as the joint development of the Bzhenow shale in West Sibera. Following the sanctions ExxonMobil was required to suspend its activities in the joint ventures. This follows the announcement from September 2014 of successful discovery of petroleum resources at the Kay 1 well in the Kara Sea. Similarly, in June 2015 French energy company Total withdrew from a joint venture with Russia’s Lukoil under which they had planned to develop the Bazheno shale oil fields in West Siberia. The company also chose to return to Gazprom a 25 percent share it held in the postponed Shtokman gas field. Not affected by western sanctions is the development of the world’s first ice-resistance oil platform Prirazlomnaya which Gazprom constructed in the Pechora Sea. Production of oil began in April 2014.

Northern Sea Route

Development of the Northern Sea Route (NSR) began in June 1936 when the Council of People’s Commissar of the former USSR established the Chief Directorate of the Northern Sea Route (Glavsevmorput). The Directorate was tasked with establishing and developing a route from the Barents Sea to the Bering Strait. Its task encompassed the establishment of sea, river and air transportation routes, the required telecommunications infrastructure and the leading of all Soviet research efforts in the Arctic. Furthermore, it also spearheaded the development of natural resources in the Arctic and the construction of required production facilities. In addition, it was also in charge of the promotion of economic development of the indigenous peoples of the Arctic. The Northern Sea Route has since grown to be of highest importance in national and regional development plans.

Following the end of the Cold War, many of the routes of communications deteriorated and associated infrastructure fell in disrepair with the decreasing use of the NSR. Cargo traffic decreased by nearly 90 percent during the 1990s compared to the early 1980s. With the onset of increasingly ice-free summer season, especially after the record melt season of 2007 and 2012 the NSR began a revival as a national and international transport corridor. While volumes remain very limited in comparison to global shipping hotspots like the Suez and Panama Canal, the route nonetheless is of key importance for the economic development of Russian region situated along the route and the accessing, exploitation, and exporting of hydrocarbon resources in the Arctic.

In 2018, President Putin signed a decree which states that the NSR is to be developed continuously with annual goods volumes set to increase to 80 million tons by 2024. This is an 8-fold increase compared to 2017. This ties into Russia’s national strategy which emphasises the development of the NSR into a global and comprehensive transport artery. Only 5 months after the Yamal liquefied natural gas (LNG) project in Northern Russia opened, volumes of shipment had exceeded two million tons of LNG. Another substantial goods increase on the NSR is coal. According to VostokCoal, 30 million tons of coal can be extracted annually by 2025 from the Taymyr Peninsula. Furthermore, a Maersk vessel loaded with Russian fish and South Korean electronics has become the first ship to fully navigate an Arctic sea route. Russia hopes this will become its new shipping highway, cutting transport times from Asia to Europe significantly by avoiding the Suez Canal. The NSR is still not a viable and sustainable option for most shipping businesses, as the passage is only feasible for 3 months of the year.

Given the importance of the Arctic to the national economic development and due to the centralized nature and domination by state-owned companies of the oil and gas sector, Arctic governance has mostly been centralized with direct influence from Moscow. This fact was underlined with the creation of the new federal Arctic Commission in February 2015, which is responsible for coordinating the work of all other bodies engaged in the Arctic, including the National Security Council and the Ministry of Natural Resources, the Ministry of Energy, the Ministry for Economic Development, and the Ministry for Transport. The Commission and its approximately 60 officials are tasked with evaluating the effectiveness of existing policy and making decisions related to the regional development.

With the creation of the Commission, President Putin has aimed for a single responsible agency to implement Arctic policy. Furthermore, it places more control over Arctic policy and development in the hand of federally appointed officials, such as the Commission’s head rather than regionally elected governors and other officials, further removed from the control of Moscow. In 2018, Putin requested the government to elaborate the question on how to establish a special structure responsible for NSR development and adjacent territories, security and management. Since the launch of the Yamal LNG and Sabetta ports, President Putin has confirmed that industrial developments in the Arctic remain on the top of the priority list.

• Russian Federation Policy for the Arctic to 2020
• On the Russian research centre in Svalbard
• New version of the state programme Socioeconomic Development of the Arctic Zone of the Russian Federation
• Russian Antarctic Expedition operations plan for 2018–2022
• Russian Association of the Indigenous Peoples of the North (RAIPON)