We should not put on ice Arctic development

Russia began exploring natural resources in the Arctic one of the first in the world. For more than half a century, mineral resource projects are implemented in Murmansk, Norilsk, Timano-Pechora, and Chukotka. Since the 70s, almost every month we hear of Yamal, which ensures annual supply of more than 200 million tons of oil equivalent to the world market.

The mineral resource base remains a key driver in the development of the Arctic macroregion. Given its uniqueness, this is not surprising. More than 700 oil and gas reservoirs, deposits of non-ferrous, rare and precious metals, including more than 350 gold deposits, have been discovered in the Arctic territories. According to the joint assessment of domestic and international experts, up to 30% of the world's untapped hydrocarbon reserves are concentrated on the Arctic shelf.

Let me note that the only large production field discovered in 2014 was located in the Arctic. This refers to the oil and gas condensate field "Pobeda" discovered by Rosneft on the Kara Sea shelf.

We certainly cannot ignore the challenges faced by our industry. The difficult situation on the raw material markets, macroeconomic and geopolitical instability – all the factors complicating the implementation of major projects. Especially in the Arctic with its additional problems: a lack of infrastructure, a shortage of human resources, and harsh climatic conditions.

It suffices to say that over the past 10 years, the average cost of discovering a barrel of oil equivalent in new fields, according to international estimates, has increased five-fold – from 0.85 to 4.2 dollars per barrel. And the exploitation cost, according to companies' estimates, has increased three-fold. As a result, large investments in new projects are cut down around the world. According to international agencies, 118 billion dollars of investments in the implementation of new oil and gas projects have been frozen this year. Naturally, this also refers to the Arctic. One such example is a recent decision by Shell to abandon its operation off Alaska coast in the Chukchi Sea.

Does this mean that we have to put on ice the development of the Arctic industrial capacity? In my opinion, in no way. This applies not only to mining operations, but also to advancing high-tech industries, implementing socio-economic projects and ensuring the stability of a large part of our country.

In actual practice, the implementation of any large infrastructure project allows for an obvious multiplying effect: the construction of new roads in the areas of active mining operations is accelerated, efficient logistics and comfortable conditions for professionals are provided. Our common objective is to accelerate the implementation of such projects by supporting them in every possible way.

The Russian Arctic has a number of competitive advantages over the Arctic territories of other countries. We have such unique tool as the Northern Sea Route. Its cargo traffic is growing from year to year, but today, the Northern Sea Route's capacity is not used to the full extent. However, we are confident that the development and exploration of new fields will give a powerful impetus to its development.

There is no doubt that the implementation of projects on the oil and gas fields development using the sea transportation scheme (first and foremost, this refers to the Yamal SPG project) will provide the expected maritime safety and, as a consequence, will increase the demand for the Arctic sea routes among international traders.

To materialize global Arctic projects, a systematic approach to their implementation should be provided. I am certain that only in this case we will be able to cope with any challenges and sanctions.

The material is based on the speech by the Minister of Natural Resources and Environment of the Russian Federation Sergei Donskoi at the working session "Business climate in the Arctic: from permafrost to comfortable environment."