Russia is open to allowing private oil and gas companies to research and develop the Arctic shelf in order to spare the government the huge expenses needed for the job.
“We understand very well that Russia’s Arctic zone has not been researched well enough. Of course, we would want to research it more thoroughly. The government cannot afford making this kind of investment now, as it is very expensive,” Minister of Natural Resources and Environment Dmitry Kobylkin said on Wednesday, speaking to reporters on the sidelines of the Eastern Economic Forum (EEF) in Vladivostok, in Russia’s Far East.
Kobylkin suggested that “it will be feasible to open the gates as wide as possible for those who would want to participate” in the development of the region.
“We are talking about [access by private investors to] the undistributed funds, to the under-researched territory. Of course, it would be great if such investors emerge.” He also noted that the ministry will outline its official position on the issue in the nearest future, as well as the conditions under which private investors would be allowed to work in the Arctic.
“In any case, we will determine the rules of the game… In general, the more thoroughly we research the territory, the better,” Kobyklin concluded.
According to Russian law, only state-controlled companies (in which the state owns at least 50 percent) with at least five years of experience working on an oil shelf can apply for work in the Arctic. Currently, only Gazprom and Rosneft are authorized to operate there. Kobylkin said his ministry is in talks with the two energy giants about increasing their Arctic exploration.
Last month, proposals for the opening of Russia’s Arctic shelf to private investors were outlined by Russian deputy prime ministers Dmitry Kozak and Yuri Trutnev. They issued an order to introduce a bill that would expand and regulate the access to the region by private investors for the purpose of development.
According to their instruction, the bill should provide for “expanding the circle of [companies] who may be granted the right to use subsoil resources containing hydrocarbon reserves and resources located on the continental shelf of the Arctic zone of the Russian Federation.”
It also calls for giving “a specific state company… functions to coordinate the work of such subsoil users.” The resources of the Arctic shelf are estimated at 17 billion tons of liquid hydrocarbons and 85 trillion cubic meters of gas.