Russia’s New ‘Arctic Offensive’: Do the Benefits Outweigh the Costs? (Part Two)
Publication: Eurasia Daily Monitor Volume: 18 Issue: 35
Prirazlomnaya oil platform, Russian High North (Source: Gazprom)
Government.ru, February 1; see
Part One in EDM, February 17). While this plan might result in some longer-term solutions to anemic socio-economic development in the region, Moscow needs to be able to generate revenues from its vast Arctic resources right away to cover growing budgetary expenses. Yet until recently, Russia’s ability to tap the economic potential of the High North has been hindered by two interdependent factors. First, as noted by the head of the financial-analytical Alperi Center, Alexander Razyvaev, “[T]he Arctic region is Russia’s last unexplored oil and [natural] gas province […] the problem is that without tax subsidies, development of the majority of local deposits is only economically profitable at an oil price of $100 per barrel…” He added, “[I]n order to be able to reap the benefits, some serious investments are needed” (