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Arctic Yearbook 2013
Filimonova
Today, oil and gas resources in East Siberia and on the Arctic continental shelf are viewed by the
Russian state as new potential areas for energy production. In 2008 during the Security Council
meeting, President Dmitry Medvedev (2008-2012) announced a mission to convert the Arctic region
into a resource base of the 21
st
century, to compensate the dwindling resources in West Siberia (Ilyn,
2008). Recoverable hydrocarbon resources on Russia‘s continental shelf account for up to 100
billion tons, including more than 13.5 billion tons of oil and about 73 trillion m
3
of gas (Ministry of
Natural Resources and Ecology, 2006).
The bulk of resources (about 66.5%) are located in the northern seas (Barents and Kara Seas). Apart
from the economic reasons for energy supply diversification, offshore development is linked with
Russian geopolitical interests in guaranteeing its presence in the Arctic waters via a military
component. In addition, offshore hydrocarbon production is associated with the socio-economic
development of the Northern regions in Russia.
The ―Strategy for the Development of the Arctic Zone of the Russian Federation and National
Security for the Period up to 2020‖, published in February 2013, outlined the policy directions and
the mechanisms needed for the relocation of oil and gas production into new areas. The strategy
prescribes a development of a natural resource base by implementing new technologies, conducting
complex studies on the continental shelf and in coastal zone, forming reserve fund deposits and
accomplishing relevant infrastructure projects (Government of Russia, 2013). One of the
mechanisms for the tasks‘ implementation is based on collaboration between state and business
organizations, including foreign entities.
Hence, this study provides an analysis of the current state of relations between the Russian
government, state-controlled (Gazprom and Rosneft), and private (LUKOIL and NOVATEK) oil
and gas companies. The article begins with a brief overview of a legal set of actors and their
respective rights for operation on the Arctic continental shelf. Furthermore, it provides a
comparative analysis of the Russian government, state and private companies‘ offshore strategies
and interests. Finally, the article outlines the prospective development of the Russian Arctic offshore
sector in relation to the energy sector development in other Arctic states, as well as with the on-
going changes in the global energy markets.
Subsoil Legislation: Rules for Operation on the Russian Continental Shelf
The Russian legislation on subsoil use is based on article 72 of the Constitution of the Russian
Federation. This article states that any possession, use and disposal of land, subsoil, water and other
natural resources is in joint jurisdiction of the federal government and the federal subjects (The
Constitution, 1993).
The subsoil activity is regulated also by federal laws, decrees and orders issued by the President and
the government of the Russian Federation, ministerial resolutions, and by adoption in accordance
with federal laws the statutory legal acts of the federal subjects of the Russian Federation. The core
federal law in the sphere of subsoil use is Federal Law 2395-1 ―On Subsoil Resources‖ dated 21
February 1992. The Federal Law regulates issues connected to geological survey, license granting
and natural resources extraction and production. The subsoil operations on the continental shelf are