New UI Paper: Commercial or political interests - oil and gas in the Russian Arctic

As a result of the melting polar ice cap the oil and gas riches at the bottom of the Arctic seas are becoming increasingly accessible, and President Vladimir Putin has made it a top priority for Russia to be one among those nations who manage to extract the valuable mineral resources of the High North. At the same time as Russian economic growth is seriously halting, the sources for the previous economic development, i.e. current oil and gas fields, are being depleted, according to recent statements by the Russian President (Sergeev, 2014). The Arctic is portrayed as a guarantee of continued economic security and wealth of the country. 

But the challenges for offshore development in the far north are many. Policies and regulations for Arctic oil and gas exploration and extraction are far from facilitating the work of the state companies of Rosneft and Gazprom, which have received licenses for extracting oil and gas from the northern shelf. Political aspirations, driven by a nationalistic rationale of fear of foreign involvement in the Russian energy sector are at odds with the economic realities of Arctic offshore shelf development. With its one hand the government is pushing for a more rapid development of the northern shelf, at the same time the other stalls the work of the state companies through tight regulations and restrictions. 

For the average observer, it would probably give the impression of the Russian state being economically schizophrenic. But there is more to it than meets the eye.

Erik Larusson was a member of the Russia Program at the Swedish Institute of International Affairs between February and May 2014. His main research interest lies in safety and security issues in the Arctic region, with a distinct focus on Russia. 

Read full paper here:
Commercial or political interests: oil and gas in the Russian Arctic