Arctic resources for innovative development of Russia

16 april 2014

“The economic model based on raw materials nearly drained, innovation in natural resources exploitation has become the country’s new development vector. Exploitation of Arctic resources is mostly needed to supply Russia’s domestic industries rather than for sale”, said the Head of the Directorate for Strategic Studies in Energy of the Analytical Center Alexander Kudrin, speaking out at the Conference “Russian Arctic Oil and Gas 2014”.

According to Mr. Kurdin, oil and gas production is becoming increasingly costly; for the reason that Arctic resources, extraction of which will require considerable investments, are becoming fairly competitive nowadays. The expert pointed out that the Arctic exploration support measures, which are indicated in the Energy Strategy of Russia up to 2013, provide not only flexible taxation but also other development directions, including international cooperation.

Alexander Kurdin emphasized that Arctic resources are not as crucial to the world as they are to Russia since shale oil and gas exploitation is a promising field for many countries. At the same time Mr. Kurdin remarked that given the high exploitation costs of Arctic resources, the efficiency of projects for their extraction should be thoroughly monitored. One should bear in mind that expenses will encompass not only extraction and logistics, but also environmental risks, which is a positive side since ecological concerns will act as a slowing mechanism in Arctic exploitation. 

Within the frameworks of the Conference Alexander Kurdin took part in a discussion regarding the LNG market. According to him, the state’s interest in developing relevant projects is to increase Russian supply flexibility. «If we have LNG, it is possible to charge additional fees based on such flexibility and our presence in various parts of the world”, Mr. Kurdin remarked.