Oil, Gas and Transport Industries in Russian Arctic: History
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Elena Katysheva

Russia’s raw hydrocarbon potential is described by specific features such as regional uneven development, underdevelopment of infrastructure in promising production areas, and the accumulation of significant oil and gas volumes in the offshore areas.

  • Arctic
  • oil and gas industry
  • shelf
  • transport and logistics system

1. Introduction

Russia’s raw hydrocarbon potential is described by specific features such as regional uneven development, underdevelopment of infrastructure in promising production areas, and the accumulation of significant oil and gas volumes in the offshore areas.
The recoverable oil and gas reserves in the Arctic exceed 245 billion tons of standard fuel [1][2]. Currently, we know 25 deposits on the Arctic shelf of Russia, located in the Barents and Kara Seas. Recoverable commercial reserves in these fields are estimated at 430 million tons of oil and 8.5 trillion cubic meters of natural gas. About 85% of these reserves are concentrated in the West Siberian, Timan-Pechora, and Barents-Kara oil and gas provinces, while the main share of the reserves (161.7 billion tons of standard fuel) falls on the West Siberian province [3].
In the context of the depletion of hydrocarbon reserves in traditional onshore production regions and taking into account the strategic importance of these natural resources for Russia, it becomes necessary to develop deposits in new regions with a complex geological structure, in particular, in the territories of Russia’s Arctic territory [4]. It should be noted that at present, the development of fields in the Russian Arctic, including the continental shelf, is one of the most relevant areas for the development of the Russian oil and gas complex [5]. The Western Arctic shelf of Russia today can be considered a very promising area for the preparation of the resource base since more than 70% of the hydrocarbon potential of the Arctic shelf is concentrated within the Kara and Barents Seas, while the share of natural gas in total resources reaches 90% [2].
The development of large oil and gas fields in the Arctic zone of Russia and the waters of the Arctic Ocean can serve as a factor in a significant increase in the gross regional product of the Arctic regions of the country and an incentive for a multiplier effect in the Russian economy as a whole. According to the Federal State Statistics Service of Russia, the share of the gross regional product produced in the Arctic zone in the total gross regional product of the constituent entities of the Russian Federation increased from 5% in 2014 to 6.2% in 2021 [6].
The development of the Arctic fields can become a catalyst for the modernization of the oil and gas industry for Russia. After the introduction in 2014 of economic sanctions aimed at limiting the transfer of technologies for the development of oil and gas fields in the Arctic, large mining companies began to master qualitatively new technologies, closing the gap with other Arctic states.
To revitalize the activities of oil and gas companies in the Arctic zone, the issues of procurement, transportation, and processing of extracted raw hydrocarbons should be solved, and regional infrastructures should be created. Thus, stable economic ties of the newly created oil and gas industry with other sectors of the economy arise. The volume of cargo shipped to the Arctic regions by water transport increased from 16,531.6 thousand tons in 2000 to 25,479.7 thousand tons in 2021. The most significant growth was shown by the volume of liquid cargo transported by sea—from 440.1 thousand tons in 2000 to 4466.2 thousand tons in 2021 [6]. Consequently, the transport sector performs an important function in the development of the Arctic regions, being a tool for the implementation of national and regional economic interests and allowing the delivery of products and raw materials to markets. A transport system in this region should be developed given that one transport highway can serve as a basis for more than one deposit [7]. In this context, the oil and gas industry in the Russian Arctic and the regional transport system can form the basis for a common transport and logistics infrastructure, which, in its turn, can become a source of strategic resources for the development of the Arctic zone.

2. Analysis of the Interconnected Development Potential of the Oil, Gas and Transport Industries in the Russian Arctic

Over the past decade, the pace of study of the northern and Arctic territories has been growing rapidly. Theoretical and practical issues of the development of the Russian Arctic are most effectively worked out in the research of scientists at the St. Petersburg Mining University, the Kola Scientific Center of the Russian Academy of Sciences, and Moscow State University.
The problems of developing oil and gas fields on the Russian Arctic shelf are reflected in scientific publications of many researchers; however, special attention should be paid to the works of A.E. Cherepovitsyn, A.M. Fadeev, and V.A. Zuckerman [1][7][8][9], which are dedicated to the strategic management of the oil and gas complex in the Russian Arctic. The authors note that the formation and development of production and transport infrastructure in the Arctic-producing regions is a necessary condition for the effective development of shelf fields and is an important component of state policy aimed at developing the oil and gas complex as a driver for the economic development of a new producing region. In [7][9], the authors prove that the Kola Peninsula is the most promising base region for locating logistics enterprises for the operation of fields and transportation of oil and gas.
The factors of innovative development of the Arctic regions and the issues of import substitution in the development of offshore oil and gas fields are reflected in the works of Yu.P. Ampilov [10], S.A. Berezikov [11], T.V. Ponomarenko [12], V.S. Zharov [13][14]. In particular, Yu.P. Ampilov raises the problem of significant dependence on the processes of geological exploration and production of hydrocarbons in the Arctic zone on foreign technologies and equipment, which is significantly aggravated by conditions of sanctions. In addition, the author analyzes the situation that has developed in the markets for hydrocarbon products in connection with the current political situation and predicts a reorientation of oil and gas cargo flows from the European to Asian direction. It should be noted that Yu.P. Ampilov calls into question the large-scale implementation of offshore oil and gas projects in the Arctic in the near future [10]. V.S. Zharov [13][14] concludes that the innovative activity of companies developing Arctic deposits is extremely low. The author emphasizes that without the necessary technological modernization, it is impossible to achieve the planned growth rates in production, which, in turn, will adversely affect the dynamics of cargo traffic along the Arctic transport corridors.
The main direction of the scientific activity of E.A. Korczak [15], T.P. Skufina, E.E. Emelyanova [16], and I.G. Gerasimova [17] is the solution to the problems of the socio-economic development of the Arctic territories.
T.P. Skufina and E.E. Emelyanova note that the share of transport services in the gross regional product of the Arctic zone of Russia since 2002 has remained consistently high—8%, with the average Russian level of 8.2% [16]. However, the authors emphasize that the extreme nature of natural and climatic conditions, vast territories, the direction and nature of historically established territorial and economic relations, and the peculiarities of settlement [16] seriously complicate and increase the cost of the formation of a unified Arctic transport system, increase the level of transport discrimination of the population, lead to the deterioration of the technical condition of the infrastructure and vehicles, and impose a number of restrictions on the use of certain modes of transport. For example, the activity of river transport is limited by a short navigation period (2–4 months), and the construction and operation of roads and railways are extremely difficult in permafrost and severe weather conditions in winter [16]. These problems are especially relevant for sparsely populated and hard-to-reach Arctic territories in the eastern sector of the Arctic. The lack of overland transport communication with the rest of the country in this area determines the multiple links and non-alternative nature of transport service schemes [16].
N.A. Serova N.A. and V.A. Serova [18][19] consider the main factors that determine the specifics of the development of transport in the Arctic: they note an insufficient provision of the Arctic zone with land transport communications compared to the average Russian level. The authors point out that with the onset of the global economic crisis, and subsequently the introduction of economic sanctions, funding for a number of Arctic infrastructure projects was reduced or suspended [18]. In particular, the share of investments in the transport industry of the Yamalo-Nenets Autonomous District (YNAD) decreased by 70%. One of the most serious threats to the exploitation of oil and gas fields is the problem of obsolescence of fixed assets of transport organizations—the average level of depreciation in transport is 47%, and depending on the mode of transport—90% [19].
Environmental problems of the implementation of oil and gas projects in the Arctic are considered in the works of N.V. Romasheva, D.M. Dmitrieva, G. Seite et al. [20][21][22][23].
The issues of the transport infrastructure formation in the Arctic zone of Russia, as well as the risks associated with extreme conditions for the transportation of hydrocarbon raw materials, are devoted to the works of A.A. Biev [24][25], N.I. Komkov, V.S. Selin [26].
N.I. Komkov, V.S. Selin, V.A. Zuckerman, and E.S. Goryachevskaya [26][27][28] consider possible scenario forecasts for the development of the NSR. The authors believe that the beginning of the shelf development, especially taking into account the probable climate warming, can lead to the implementation of an optimistic scenario, which provides for an increase in the volume of cargo transportation by 2020 to 25 million tons [26]. According to experts, the Northern Sea Route can become one of the main cargo routes on the globe and can reduce ice cover, which will favor the development of oil production and offshore gas [27]. However, the authors also warn of new risks. Influenced by factors such as rising sea levels, thawing permafrost and increased impact of waves as a result of the expansion of the open area water will further erode coastlines in the Arctic. All this can have dangerous impacts on the entire infrastructure, primarily the port [28], which must be taken into account when modernizing transport infrastructure. It should be noted that the high instability of the considered exogenous factors (the state of global commodity markets, geopolitical relations, and strategies of global corporations) [26][29] does not allow us to identify certain statistical correlations and forces authors to accept extreme expert scenarios, which reduces their reliability.
Zhao Z. et al. [30] note that in an unstable geopolitical situation, the presence of a single energy supply channel, as well as the limitation of energy supply through land transport corridors, can pose a potential threat to the energy security of a country or region. In this regard, the authors emphasize the exceptional importance of creating a maritime transport corridor. Taking the efficiency and reliability of pipeline transport into account, Zhang F. et al. [31] and Rios-Mercado R.Z et al. [32], however, also indicate that when gas is supplied over long distances (in particular, from Russia to Asian markets), it is more cost-effective to transport it in a liquefied state by sea.
Currently, the aggravation of the geopolitical situation, in particular, the tightening of economic sanctions, leads to changes in the structure of world energy transport flows. A number of authors [33][34] consider the influence of political factors on the natural gas market. Mozakka M. believes that for the Russian LNG, the East Asian market will become an alternative to the European market [33]. Richman et al. analyze the place of Russia in the world gas market depending on the state of its relations with the USA and Europe [34] and conclude the inevitability of the reorientation of Russian energy resource flows towards Asian directions.
When transporting cargo over long distances, it often becomes necessary to use a multimodal transportation scheme, i.e., the use of different modes of transport along the route of the cargo. In this regard, Song D. [35] points out the need to organize the coordinated work of the transport infrastructure, in particular, port and railway. The author proposes modeling and routing methods in a multimodal transport network. In addition, the author analyzes ways to model logistics processes in ports with limited capacity. The research of Cheraghchi F et al. [36] is also devoted to a similar topic, in which a mathematical model was developed for compiling optimal ship traffic schedules, taking into account the throughput of the port, the number of loading and unloading terminals, the number of ships, and the state of adjacent land transport communications.

This entry is adapted from the peer-reviewed paper 10.3390/en16073124

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