What does business expect from the state in the Arctic

What does business expect from the state in the Arctic

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Photo: Mikhail Metzel / TASS

From 29 to 30 March hosted the international Arctic forum “the Arctic — territory of dialogue”. RBC interviewed officials and representatives of big business, what, in their opinion, the effectiveness of cooperation of authorities and private business in the Arctic in the current economic environment and whether to change existing rules

At the forum “Arctic — territory of dialogue” was actively discussed partnership between the state and business in the Arctic and its consequences. In the Russian legislation there is a concept of public-private partnerships, including in the Arctic. Businesses allowed to build and invest in infrastructure, but the rights to extract resources (including oil and gas) in this region had not. Do I need to change the existing rules, expanding private capital participation in the development of the Arctic, including oil and gas, or there is reason to leave them the same? What other opportunities for cooperation between business and the state is now in this region, the existing legal conditions?



The Chairman of the Board FK “Opening” Evgenie Dankevich:

“Opportunities for public-private partnership in the Arctic is more than enough. But in my opinion, huge potential for money to work in the Arctic lies in the field of domestic tourism, which has not received adequate development due to the lack of quality infrastructure. We have a lot of places where there is something to see, but often there are hard to reach and even harder to find good housing. Meanwhile domestic tourism is a great business and good money. And in this field there is a place and small business, and large and medium-sized companies, which are able to invest in the construction of hotels, roads, entertainment infrastructure.

Private business in Russia is mainly small businesses and medium-sized companies. They can not force yourself to do major projects in the extractive industries, which require significant investments, including in exploration. In tourism more such opportunities. It is obvious that only the government alone cannot build all the roads or hotels in remote regions. Only business with that won’t make it either. But in the framework of public-private partnership to solve this problem.”



Dmitry Bosov, co-owner of Alltech, Chairman of the Board of Directors of the company Vostokugol’:

“Public-private partnership is possible everywhere, where it wants the state. The business is focused on where it is beneficial. If the government is willing to provide some support or assistance, the business always. So this is primarily a matter for state agencies and authorities. In the current political and economic situation, the presence in the Arctic is clearly a priority for the government, so it is also interested in cooperation with businesses in the region. Therefore, it should be to support companies working in the Arctic. But our company has not yet applied for any government support, and not a penny of budget money is not used. Unfortunately, any request for budget funds — it’s quite a long process. Therefore, we prefer to first create the database, and then you can start with the state of something to say, and not to talk about some projects. The company Vostokugol ‘ itself is built in four months, a Small port: it already took two of the ship. We are not attracted to the state because it means a long time to obtain. And if they are somehow wrong to spend, it will be a big problem. Personally if something does not work, it will be just our financial losses, and if the participation of the state, it is already a big problem.”



Sergey Donskoy, Minister of natural resources:

“There are various mechanisms that allow private companies to build relationships with owners of licenses for oil and gas in the Arctic. Now these are state-owned companies, such as Rosneft or Gazprom. For those wishing to work in the Arctic in the field of oil and gas the most optimal mechanism of joint ventures with them. Always demanded new technology in this field, Contracting opportunities, finances. In today’s situation, when a license to own these companies, has its own logic, because resource extraction in the Arctic is not only the right and opportunity to make money, it’s a greater responsibility, including environmental responsibility. This requires relevant work experience.

Any process of extraction of oil or gas requires training. Exploration in the Arctic takes a long time. Now you can plan for the future, because to extract oil or gas here on an industrial scale, likely after 2030. Hydrocarbon prices, though reduced, will increase over time as demand. For such projects we are changing the tax base, remove administrative barriers. Companies have reduced costs because of these steps, and they can plan their costs over a longer period”.



Leonid Mikhelson, Chairman of the Board and co-owner of NOVATEK

“In the Russian legislation there is an understanding of public-private partnerships. By this I mean the creation of a product with the participation of government and private business. We are in partnership with the state are implementing the project “Yamal LNG” there is a rather big share of state aid. But this is not a pure public-private partnership. The state creates the waters, alternate channels, allows the shipping industry, and we build our. This partnership of state have in all countries: the state is obliged to participate in the construction of infrastructure, and we hope that it will continue to do it.”

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Today there is a solution that licenses for production of oil or gas may obtain only the companies with government control. We call ourselves oil and gas company and not too worried about it, because our main reserves are onshore (out of shelf), but not in offshore. Now there is no desire to go on the shelf: we will develop existing opportunities”.



Sergei Ivanov, the Russian President’s special envoy on environmental activities, environment and transport:

“Are you asking why private companies to invest in the Arctic? Stupid question. Look at the Sabetta is a vivid example of the effectiveness of public-private partnerships: in an open field built in the Arctic port and the LNG plant near. Here still need to change: everything is working!”