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Arctic Yearbook 2013
Filimonova
Complex, which is headed by the deputy Prime Minister Arkady Dvorkovich (2012-present)
(Topalov, 2012). In general, the deputy Prime Minister advocates for the liberalization of the Federal
Law ―On Subsoil Resources‖; the approach is also supported by the Ministry of Natural Resources
and Ecology, Ministry of Economic Development and it stipulates expanding the number of
companies that can work offshore, for tax regime facilitation and for an increase in the number of
geological surveys conducted on the continental shelf. According to the Minister of Natural
Resources and Ecology Jury Trutnev (2004-2012), the development of many offshore projects will
be very expensive and it will require 150 years to examine the hydrocarbon potential of the
continental shelf in the Arctic under the current legislation (Melnikov, 2011). Currently, the density
of seismic surveys covering the most promising waters of the Arctic Seas, except the Barents and
Pechora seas, is not more than 0.15 per 1 km
2
, and for the eastern seas, less than 0.1 km to 1 km
2
(Rbk Daily, 2013).
Over the past few years, the Ministry of Natural Resources and Ecology has been constantly
lobbying for an increase in the number of legal entities that could gain the right to conduct
economic activities on the Arctic continental shelf. In 2010 the Ministry proposed the consideration
of both national and international offshore operations experience in making its decisions on granting
subsoil use licenses for working on the continental shelf. However, the amendments introduced did
not receive approval from the Ministry of Energy that called for the need to improve the proposals.
In the following year, the Ministry initiated a proposal allowing legal foreign entities to acquire
licenses to plots of deposits until the end of the geological survey stage in the relevant area of
interest. The proposals also echoed initiatives articulated by the deputy Prime Minister Igor Sechin
(1999-2008), who was making an effort into the creation of a strategic alliance together with BP for
joint exploration of the offshore deposits in the Arctic. In 2012 the Ministry of Natural Resources
and Ecology made a further step towards bringing changes into the existing subsoil legislation. It
drafted its ―Program for Exploration and Development of the Continental Shelf of Russia for the
Period up to 2030‖ stipulating that private companies could conduct geological surveys without the
collaboration or participation of the state-controlled companies, and introduced changes in the tax
regime that are dependent on the complexity of the deposit. However, the draft was later sent back
for revision by the Prime Minister Dmitry Medvedev (2012-present).
A certain breakthrough has been associated with the government meeting in Novy Urengoy, which
was held in the beginning of 2013. However, the results of the meeting confirmed the senior
officials‘ stance towards preservation of the state-controlled companies‘ monopolies on the
continental shelf. The outcome of the meeting could be explained by the existing fierce lobby of the
state-controlled energy companies and their strong connection with the state officials in the Russian
government and the Russian President.
Strong supporters for subsoil law liberalization include private Russian energy companies LUKOIL,
Surgutneftegaz, Bashneft and Zarubezneft. These companies have addressed the government and
the President several times requesting the opening of the continental shelf for private business. The
main argument expressed by the opponents of liberalization is the private companies‘ inability to
cover the financial costs of the Arctic projects and their lack of offshore experience. However,