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Meeting on Arctic region’s comprehensive development

March 29, 2017, Arkhangelsk Region

In the course of his trip to Alexandra Land in the Franz Josef Archipelago Vladimir Putin held a meeting on the comprehensive development of the Arctic region.

Prime Minister Dmitry Medvedev, Minister of Natural Resources and the Environment Sergei Donskoy, Defence Minister Sergei Shoigu, and Special Presidential Representative for Nature Protection, the Environment, and Transport Sergei Ivanov also took part in the meeting.

* * *

President of Russia Vladimir Putin: Colleagues,

During the first part of the meeting, we examined what has been done during the Year of the Environment with regard to this particular environmental issue. I would like to thank the Government, the ministries and agencies, the Environment Ministry, the Defence Ministry and other agencies that took part in this work. A tremendous amount of work has been done and tens of thousands of tonnes of waste have been cleared. Metal objects, containers, fuel and lubricant waste, all that was left here after Russia all but withdrew from the region in the early 1990s. Nothing got cleaned up back then. Everything was left as it was, and it was starting to create a serious threat to this region’s highly fragile ecosystem.

We were briefed on what is happening in the military area. I would like now to focus on economic matters. I would like to remind you that this region has tremendous significance for bolstering Russia’s position in the world and guaranteeing our economic interests. Our Arctic zone covers a surface of 3.4 million square kilometres and accounts for nearly 20 percent – 19.9 percent – of our country’s territory.

The Arctic zone is one of the country’s biggest raw materials sources and has practically untouched reserves of hydrocarbons and minerals of global significance. These resources are important not only for Russia but for the entire world. However, the Arctic region cannot function effectively without state regulation and support. The region is home to the main reserves of a number of minerals of decisive significance for Russia’s economic development. The Arctic region holds 80 percent of Russia’s explored economic gas reserves, for example. It holds 90 percent of Russia’s offshore hydrocarbon reserves. The Barents and Kara seas between them hold 70 percent of our offshore reserves.

The Arctic Ocean’s deep-water zones are predicted to hold enormous quantities of hydrocarbons, approximately 15–20 billion tonnes of reference fuel. The Russian Academy of Sciences estimates that the Arctic zone contains the bulk of Russian and global reserves of a number of minerals: 40 percent of the gold reserves, 60 percent of oil reserves, from 60 to 90 percent of gas reserves, and 30 percent of global gas reserves, 90 percent of chrome and manganese, 47 percent of platinum reserves, 100 percent of bedrock diamonds, and more.

The Arctic region’s subsoil resources are estimated to be worth more than $30 trillion, with energy resources accounting for two thirds of this. Our Arctic zone accounts for 100 percent of the diamonds, antimony, apatites and other metals and minerals, rare metals, rare earth elements mined here, 98 percent of the platinoids, 95 percent of gas, 90 percent of nickel and cobalt, and 60 percent of copper and oil. This is all produced here, in the Arctic region.

The total value of known subsoil mineral reserves in the Arctic zone is estimated at around $1.5–2 trillion. However, much of the subsoil reserves in the region have yet to be explored and developed. The current level of development does not match the potential of this region, which currently provides around 11 percent of our national revenue and up to 22 percent of our exports.

Many mineral deposits are truly unique. Russia’s extensive continental shelf in the northern seas, with its rich natural resources, together with the biological resources of Russia’s 200-mile economic zone give us the conditions we need for long-term – let me stress this word – structural transformation to pursue the industrial development of the northern and Arctic seas.

This is supported by our own and international estimates. The World Petroleum Council (WPC) says in a report that by 2030, Russia will be producing 55 percent of all that is extracted in the Arctic zone.

Offshore oil production in the Arctic will increase 3.6-fold to 2.2 million barrels of oil equivalent a day. You know that this work is already actively underway. The biggest and most important international hydrocarbon production projects in the Arctic region are well known. They are the Yamal LNG, Sakhalin 1 and Sakhalin 2, where foreign partners are working actively together with Russian companies.

We are also working together with foreign companies to conduct geophysical studies of the Fedynsky section and other sections of the Barents Sea. In September 2014, exploration conducted by Rosneft and ExxonMobil in the Kara Sea revealed one of the Arctic’s biggest oil fields, which was dubbed Pobeda [Victory]. Forecast hydrocarbon reserves in our seas are estimated at more than 100 billion tonnes in oil equivalent. The subsoil fields in the Barents Sea alone contain 2.8 trillion cubic metres of gas. The Arctic region also has rich coal reserves, and I want to stress the point that total quality forecast reserves are estimated at 780 billion tonnes at the very least, of which energy-producing coal accounts for 599 billion tonnes, and coking coal for more than 80 billion tonnes.

Aside from the hydrocarbon deposits, the Arctic region is home, as I have said, to unique reserves of copper and nickel ore, tin, platinum, diamonds, gold, and more. More than 100 deposits of strategic metals have been discovered in the greater Arctic region and are in various stages of development. Russia is working actively here, and so are our neighbours. We have work underway at 40 sites today, the USA and Canada have 20 sites, Sweden has 10, Greenland 6, and Finland 3.

In this respect, I would like to say that, as I have demonstrated with examples of various projects on which we are working together, we are open to broad partnership with our partners and with other countries in order to carry out major joint mutually advantageous projects, from developing natural resources and global transport corridors to science and the environment.

Russia has been consistently increasing its presence in the Arctic. This is natural for the largest Arctic country. The port of Sabetta is under construction, the Zapolyarye-Purpe oil pipeline has been launched, Norilsk Nickel is modernising its production facilities, and Gazprom, Rosneft, Novatek and several other Russian majors are developing new deposits. I have mentioned some of their projects.

At the same time, social infrastructure is being built in the region, the housing and utility systems are being modernised and investments are being made into the improvement of Arctic cities and towns.

In all, several dozen promising projects are to be implemented in the Arctic. These anchor projects will boost the development of Arctic regions.

The implementation of our plans calls for coordination between the government, business and regional authorities. The coordination of all the projects and decisions is very important. They must be based on a common logic and produce the biggest effect in our efforts to strengthen the economic and tax base of the regions and the country as a whole.

We have a government programme of socioeconomic development of Russia’s Arctic zone through 2020, which we formulated in 2014. It is an analytical document that comprises a list of measures to be taken under other federal industry programmes, and it cannot be used as a financial instrument for the implementation of the Arctic strategy. As far as I know, the Economic Development Ministry is working to update the list of these projects.

I would like the Government to accelerate the revision of the socioeconomic development programme for the Arctic zone. The new wording should include new approaches to promoting public-private partnerships during the implementation of large-scale infrastructure projects, including shelf projects, and also measures to enhance the competitiveness of the Northern Sea Route. We must use the potential of international cooperation comprehensively, as I have said twice.

There is considerable interest in working with us, and we should bolster it with joint projects. We all know and are providing support to Novatek’s Yamal LNG project. I would like to remind you that total investment in this project, including in infrastructure, processing facilities and transport, looks impressive: $26 billion.

In conclusion, I would like to stress again that all our steps must not just strengthen Russia’s economic potential but also bring about positive change in the quality of life and demographic development in the Arctic regions. As I have said, all of this largely constitutes an idling reserve. We must use it effectively to the benefit of Russia as a whole. To do this, we need to bring our financial and administrative resources together and accelerate the development of the programme I have mentioned.

Prime Minister Dmitry Medvedev: May I add to that?

Vladimir Putin: Of course.

Dmitry Medvedev: You were absolutely right in pointing out that it is imperative to make all our activities in the Arctic follow a single logic, because we are dealing with a vast and rich region.

You listed all the proven reserves located in Russia’s Arctic zone, and we need a tool to develop them. Such a tool was approved by the Government in 2014. However, as you have just mentioned, it is largely of an analytical nature and represents a compilation of a variety of state programmes. I believe it is time to revise this programme, to provide separate financing for it, and to include in it all the tools that can be used to develop the fuel and energy complex, the infrastructure in general, and the social sphere, because without these things there will be no good life here, either.

At the moment, the Ministry of Economic Development and Trade has submitted to the Government a draft resolution on revising this programme. If the President instructs accordingly, I will return to this issue in person and go over the revised version, as there are, of course, differences between the departments. Then, we will report back to the President with ideas regarding the content of this programme to 2020 and beyond, as working with a horizon of three years in this case makes no sense. We are looking at multibillion investments and major construction projects, so we should approach this endeavour from a long-term perspective. Soon, the Commission for Arctic Development will put together the final version, and I will convene a general meeting, following which we will report to you.

Vladimir Putin: Good. Thank you.

The Defence Ministry, the Federal Security Service and its border guard division should work to protect our national interests in terms of ensuring our country's defence capability, and also to protect our interests in the Arctic and ensure the steady operation of the Northern Sea Route. Many Defence Ministry’s capabilities could be also used to help civil services do their job.

Defence Minister Sergei Shoigu: We will definitely consider additional ways to use our capabilities in the Arctic zone as they work to bring aboard economic institutions and other agencies to more effectively develop the Arctic resources, and, most importantly, to ensure the safe operation of the Northern Sea Route and all the economic activity in mainland Arctic and its insular portion.


March 29, 2017, Arkhangelsk Region