Mikkelsen A., Langhelle O. (eds.) Arctic Oil and Gas. Sustanability at Risk?

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efforts were directed at raising the productivity of the Northern peoples as a

supplier of raw meat and fish. Now the purpose is changed; the prior goal of

indigenous policies today is to make reindeer breeding a maximum commodity in

the exchange economy and to open it up for commercial market.

In response to this, reindeer breeders can adopt one of three strategies. They

can cooperate with the dominating society (passive accommodation), isolate

themselves from the dominating society (escape) or attempt to change the

interaction environment with the dominating society. During the Soviet times, the

first two strategies were often applied. These, however, had different conse-

quences for peoples’ living conditions. Nomadic families seldom wanted to

follow the official requirements, and therefore did not receive any support from

the state. Passive adaptation led to the steady abolition of reindeer breeding as a

rural activity.

It is very indicative that those Northern regions that had a well-organized Soviet-

plan economy also suffered the most during the transfer to market conditions. In

contrast, those who did not receive strong support from the federal budget can adapt

more easily to the new conditions and expand their traditional subsistence. Currently,

indigenous peoples are trying to create new relationships with the dominating

society, searching for partnerships with other stakeholders that are interested in

their lands. While the movement of large industrial companies into the region has

brought many negative impacts to the indigenous population, there are some

positive aspects as well. Despite losing some pasture lands, the indigenous peoples

now have access to the market for traditional products and, therefore, receive

some financial support from the companies as compensation for withdrawn

lands. According to the conclusions drawn up in the ethnographical research

mentioned above, a moderate industrial development and contact with the local

population is preferable to either an industrial boom or a complete absence of

industrial activity in the territory.

However, despite the existence of several federal laws regarding protection of

indigenous rights, the interaction between industrial companies and indigenous

peoples has many difficulties. The main challenge to the functioning of these laws

is determining the exact territorial borders of the indigenous people’s lands, an

extensive task that has not been performed until recently.

So each time there is a need for indigenous peoples’ permission for operations

on their lands, it may proceed in different ways. Typically, industrial companies sign

an agreement concerning social support of the indigenous group and the local

community. The format of the agreement has not been standardized. Therefore, this

is usually handled by corporate lawyers in the companies’ favor, and without any

actual assessment of the benefits and disadvantages for local peoples. Sometimes,

aboriginal associations invite scientists and lawyers from Moscow, St Petersburg

or Tyumen in order for these agreements to be more just. One such successful

agreement was signed between Lukoil and an indigenous agricultural production

community known as Erv. The main idea of the agreement was not just to compensate

financially for withdrawn lands, but also to support the traditional economic activity,

such as by purchasing new equipment for reindeer breeders, supplying equipment

276 E. N. Andreyeva and V. A. Kryukov

for maintaining reindeers’ health, and constructing dwelling houses for aboriginals.

The ‘oil people’ agreed to purchase traditional meat and fish products, while the

‘tundra people’ undertook to provide high-quality products.

On the other hand, many of the indigenous peoples’ claims and requirements

from the oil and gas industry are not clear-cut or well-worked out. Naturally, it is

difficult to determine the extent of real damage caused by oil operations. It is also

unclear how to assess the losses connected to the withdrawal of pasture lands and

wildlife areas. The main point is that these cannot be viewed purely in economic

terms. The loss of lands for indigenous peoples does not mean a loss of money but

a loss of the possibility to exist. Such uncertainties allow representatives of indus-

trial companies to diminish the real value of compensation during negotiations

with indigenous peoples, and can obtain permission for oil operations almost for

free. A good example of this is shown in the results of an ethno-ecological study

conducted by a group of scientists – anthropologists, biologists and lawyers – for

the company Gazflot. The report assessed the possibilities for a geological survey

and drilling in the area where the Ob Bay and the Taz Bay merge, a very rich gas

field with initial total reserves of 7.5 trillion m

(2001). The main concern to the

local population was the danger of losing the most important fish habitat in

Western Siberia. The merging area of these two bays is famous for its rich diver-

sity of the most valuable kinds of white Siberian fish. For the locals, fishery is

one of the main sources of employment along with reindeer breeding. During the

time of economic transition, many people turned back to pursuing traditional

subsistence in order to provide their families with cheap local products. The results

of the ethno-ecological study confirmed that the probability of hydrocarbon

pollution is high, and that this will bring about changes in the natural eco-

systems and fish populations. The final conclusion of the expert commission

required any activity to stop in this vulnerable and biologically valuable area.

Despite the discussion that followed at the local parliament hearings, the industrial

company managed to convince the local society that many of the requirements

highlighted in the report could be rejected because of the uncertainty connected to

the impact assessment methods. Besides, the company promised to carry out all

the necessary precautionary measures to decrease the possible negative impacts.

As a result, the company got permission to start their operations without any

formally formulated compensation amount or statement of losses and damages

to the locals.

Nevertheless, it is important to mention that the Nenets people have been

strongly supported by the regional authorities. The latter managed to realize a

number of social programs for indigenous peoples aimed at education, health,

employment and investments in the local economy. All these programs were

possible to implement owing to revenues the regional budget received from the

gas companies operating in the area.

Aboriginals’ demands and ideas for the future development of the region are

often expressed at the corporate meetings of oil and gas companies, and in the

State Duma. Khotyako Ezengi, the former chairman of a collective farm in Yar-Sale,

has been appointed by its present employer, the oil company NadymGazprom, to

The Russian model 277

278 E. N. Andreyeva and V. A. Kryukov

Table 10.5 Complex ecological assessment in the Arctic regions of RF, 2003

Arkhangelsk Murmansk Nenets

region region region

Discharge of sewage in surface aqueous 794.6 1893.3 1.3

objects (million m

)

Discharged polluted wastes in atmosphere 278.4 278.4 17.7

(thousands of tons)

Formed toxic wastes (thousands of tons) 293.5 468.9 28.6

Consumed and neutralized from total volume 20 59.1 16.7

of toxic wastes (%)

Duration of period with positive average day 150–200 140–180 110–160

temperature of air in AZ (days)

Period of freezing 165–185 170–190 200–220

Recurrence of dangerous hydrometeorological 5–25 0–25 5–35

phenomena in AZ (ph. per year)

liaise with the native peoples regarding the company’s decisions. At the international

conference ‘Oil and Gas of the Arctic’ (June 27, 2006) he stated:

We don’t want to tell what is more important for the Yamal area – reindeer or

natural gas. Both are in great demand by the people. During the last

30 years a reindeer breeder has never said that he is against industrial

development. But we do have one modest requirement – will you respect our

vital interests and protect our habitats?

The leaders of RAIPON, Sergei Haryuchi and Anatoly Todyshev, regularly

submit drafts and take legislative initiatives to protect the rights of the aboriginals

in the region, but unfortunately deputies of the State Duma do not pay adequate

attention to such actual issues of indigenous peoples at their committees.

Oil and gas – a new threat to the Murmansk region?

The Murmansk region belongs to the North-West Federal Region of Russia and

is one of the most urbanized areas of the country. Several industrial centers were

created in the region during the Soviet era of planned economic development. The

share of urban population accounts 798,400 people (or 92 per cent of region’s total)

(Murmansk Annual Statistic Book, 2005).

The environmental problems of the Kola Peninsula are connected to the lack of

satisfactory technological procedures for waste utilization in large industrial

enterprises. Hard and liquid wastes have been polluting the natural environment

for several decades. Table 10.5 presents figures from the Federal Program ‘World

Ocean’ and a state document ‘Concept of sustainable development in the Arctic

zone of the RF’.

The situation improved slightly during the perestroika period when most industrial

enterprises were in a state of deep economic crisis and had to cut their production.

The Russian model 279

Now, the region has its own sustainable development program overseen by an

international team and regional managerial structures.

The main positions of this program found their way into the regional budget,

which provides hope that the situation will change for the better. Since 2005, the

Ministry of Economics and Trade, together with the scientific centers of the

Murmansk region started a pilot program of integrated resource management in

the coastal areas entitled ‘World Ocean’.

Today, the major environmental problems in the Murmansk regions concern the

Kola Bay waters and coastline, with several industrial settlements and

military bases located along the coast. The river flow of the Kola Peninsula to the

Barents Sea is relatively insignificant (26.3 km

), so the contamination by polluted

waters in the shelf and offshore area is not very apparent. The present state of the

Kola Bay waters has been assessed, according to the complex scale of estimation, as

‘polluted’ and is in the V class of quality. Permissible concentrations of oil products

are exceeded 20–30 times and phenols by 5–6. The waters of the Kola Bay

are also contaminated with ammonium nitrogen, fluidized and organic matters,

chlorine organic pesticides and radionuclides (Denisov, 2002).

The expansion of the oil and gas industry in the Murmansk area will most

likely bring further environmental problems to the region. Therefore, a very strict

standard should be imposed prior to the exploitation of new facilities and

improvements to the pollution from other sources set up.

The coastal zone of the Barents Sea close to the Murmansk region is the only

all-year ice-free area in the Arctic Ocean. It has significant economic potential for

both the Northern part of the federal region and the whole country. Today, the

main focus of the environmental discourse is pointed towards the issues of future

development of the Barents Sea shelf, along with the rejuvenation of the Northern

Sea Route, and the increase in the shipping traffic to the West with export goods,

including oil and liquid natural gas.

The development of hydrocarbon fields in the Barents Sea and the delivery of

raw oil and liquid gas by tankers and other vessels to consumers in Russia,

European countries and the United States represent a real danger to the natural

environment of the Kola Peninsula, its adjacent waters and the offshore marine

ecosystems. This issue also seems to concern the companies currently perform-

ing in the Barents Sea – Morneftegasproject, Gasflot and Gazprom. According to

Borisov, Osetrova, Ponomarenko et al. (2001), a new program preventing marine

pollution is currently under development in Russia. The program is built upon the

latest achievements of the Russian specialists in this area, and uses the results of

several scientific studies conducted in the Barents Sea on vulnerability of biolog-

ical resources and possible scenarios of dealing with oil spills (Borisov, Osetrova,

Ponomarenko et al., 2001).

Nevertheless, the Murmansk region is not a homogenous region in term of

resources or socio-economic and environment aspects. These differences deter-

mine the diversity of attitudes towards the new petroleum development among

different social groups. The economic crisis of the reformation period resulted in

mass population migration, growth of unemployment, and bankruptcy of small- and

medium-sized businesses. The industrial centers of the Murmansk region

were the first to feel the impact of the changed market conditions. The highly

urbanized area of the Kola Bay, which was stricken by the after-effects of the

system collapse, is now hoping to be the center of the new development that will

bring job opportunities, high wages and infrastructure improvement. The harbor

facilities are expected to receive new investments in order to facilitate the future

technological expansion. According to the prospects of this new development, the

products of offshore oil and gas fields will be processed in the Murmansk harbor

for further delivery to European and American consumers.

The first draft for the marine pipeline from the Shtokman platform to the coast

of Teriberka settlement was changed in favor of Vidyaevo, a famous naval base

with available labor resources and a more attractive geographical position in

direct proximity to Murmansk. Teriberka was a center of fishery and fish processing,

one of many that existed on the Eastern coast but at which activity has now ceased.

There is little doubt that the already weak position of the Russian fisheries in the

settlements along the coast would be even more disturbed by the oil activity.

Nevertheless, after long discussions and protests of local people the decision was

made by JSC Gasprom in favor of Teriberka.

In 2005, the regional authorities of Murmansk county and JSC Gazprom signed

an agreement (on November 9, 2005) stating that the region will receive around

one billion cubic meters of natural gas for its consumer needs. Additionally, a new

plant for liquid gas production will be built, along with a terminal for the tanker

gas transportation. As one option, tankers could deliver liquid gas (LG) (around

15–18 million tons) to the US market. As other projects have demonstrated, the

oil and gas activity has been proven to lead the remote regions into a new level of

economic development. No wonder that the authorities of the Murmansk oblast

and the population of the Kola Bay region are interested in accelerating

exploration of the Shtokman reserves. A similar view is expressed by the popula-

tion of the Western parts of the region, situated close to the Norwegian border

and Varanger-fjoiord. Another plan for the new coastal terminal for oil and gas

condensate in Linahamaari, the Pechenga Bay is under discussion. Moreover,

some naval bases located on the Western coast are now aiming at performing

civilian activities connected with oil and gas.

Industrial development and the Russian Sámi

The Eastern part of the Kola Peninsula (the Lovozero region) differs considerably

from the urban Western part of the area. It has a rather large territory and a small

aboriginal Sámi population (around 14,000 people) that have lived on the Kola

Peninsula since the beginning of the first millennium. The share of indigenous

peoples on the Kola Peninsula now is so negligible, less than 1 per cent, that hardly

any information or statistical data can be found about them and their traditional

economy in official documents. Nevertheless, Sámi people have maintained a

rather stable population with very slow growth since 1959 from 1700 to 2000 in

2005. Their main occupations are reindeer breeding, hunting and fishing.

280 E. N. Andreyeva and V. A. Kryukov

These people depend on the state of biological resources, free access to use them

and the quality of environment. They are the first to feel climate changes and

impacts of anthropogenic activity. Fortunately, the main industrial centers and the

mining industry are located in other parts of the peninsula. However, the Eastern

part of the peninsula is rich in infrequent and rare earth metals that are being

processed at the plant in Revda settlement. The plant is managed by the closed

joint-stock company Lovozersky GOK.

The Lovozersky area is the only location of the Eastern branch of the

Scandinavian Sámi in Russia. During the Soviet period, they suffered significant

hardships – some of them (around 40 per cent) had been assimilated into the

majority population, speak the Russian language and live and work in the urban

settlements. The rest, who kept the traditional economic activities, have been

hustled away from their habitats to the Eastern part of the Murmansk region.

Their main activity is domestic reindeer breeding along with fishing that gives

them a substantial addition to their traditional diet. In 2000, the Sámi had more

than 60,000 reindeers in their possession. Now, this figure is going down rather

rapidly for different reasons.

It is rather indicative that the Sámi’s reindeer herding suffers from the effects of

current climate change. Seasonal migration patterns have been strongly affected by

warmer autumns and early springs. Together with other aboriginal peoples, the

Komi-Izhems, the Sámi work within two cooperative unions (transformed kolkhoz) –

Tundra (Lovozero) and Olenevod (Krasnoshelje settlement). The traditional Sámi

economy is strongly influenced by the current administrative and legislative policy

in the region. They lose their reindeers owing to the growing incidence of poaching

and cannot gain appropriate protection from the local authorities. Hunters from the

industrial centers kill reindeers; while the aboriginals are prohibited from carrying

a rifle from March until August.

Biological resources and the land used by Sámi for centuries are now attracting

the commercial attention of different groups both from the Murmansk region and

from abroad. Lately, a new long-term leasing agreement (15 years) between

American and Finnish businessmen and the regional authorities was signed on the

largest river of the Kola Peninsula – the Ponoy. The river is rich in Atlantic salmon

that comes to spawn to the river from the sea. Now, the American–Finnish

company, G. Lumis Outdoor Adventure, brings tourists from all over the world to

fish salmon, while the native peoples have to purchase a license prior to fishing in

the river where they earlier could catch about 40-80 tons annually.

The accommodation of foreign tourists on the Sámi territory became very

popular owing to the unspoiled nature and wildlife diversity of the area. However, the

distribution of tourism income does not reach the Sámi people. Moreover, when a

few Sámi enthusiasts decided to open their own small businesses for tourist accom-

modation, they could not outperform the larger companies and were, therefore,

forced to stop their activity. In addition, the construction of roads and industrial

facilities is causing great concern, as there is a danger that the reindeers will lose

their pastures and migration ways will be disturbed. The Sámi say: ‘if the reindeer

disappear, Sámi people and their culture will disappear as well’.

The Russian model 281

The problems discussed above became the starting point of a new project called

‘Civil Society of the Lovozero Region’ in March 2005. The participants of the

project are represented by the Public Organization of the Murmansk Sámi region,

Association of the Kola Sámi, the Sámi tribes, Lovozero local authorities, Worls

Wildlife Fund (WWF) (Moscow Division), the Kola Center for Protection of

Wildlife (Apatity), the Murman Fishery Agency, along with the Forestry and

Hunting Management structures. The project includes conducting seminars to

help the stakeholders understand the situation and prepare suggestions for joint

implementation of the civil actions.

In their struggle for survival, the Sámi people try to cooperate with other

indigenous peoples and international organizations. Since the end of 1980s, the

Russian Sámi communicate closely with the Sámi of the Scandinavian countries

and the Canadian Inuits. Researchers from the Arctic Institute of North America

and Calgary University provide the information on the experiences of indigenous

peoples of other Arctic countries in their struggle for land rights. They also have

support of some public organizations of the Murmansk region that constitute a

so-called ‘Northern Coalition’. The coalition includes Geya, Bellona-Murmansk,

the Kola Center for Protection of Environment and Wild Nature, Barents Office

of WWF–Russia and Nature and Youth. The main goal of the Northern Coalition

is to minimize the ecological risks and damages during the industrial development

of oil and gas resources, and to optimize the profits for sustainable development

of the Northern territories. Since 2003, the Coalition has facilitated annual

conferences with delegates from different sectors of Russian society: regional

government, oil companies, indigenous peoples and ecologists. The issues of oil

and gas development in the Arctic were considered a top priority during the

discussions.

Oil and gas versus fisheries

The competition for the resources in the Murmansk region is a rather contentious

issue, which will become more urgent in the years to come. In the Barents Sea,

fisheries and the oil and gas industry compete for the same commercial zones and

resources. Oil and gas expansion in the Barents Sea will affect these areas in the

forthcoming decade, and it is obvious that an assessment of the outcome scenarios

should be started right away.

The most reasonable idea is to conduct a complex ecological and economical

assessment of the consequences of both types of activities on all levels from inter-

national to local. The next essential measure is to create oil-free zones to protect

the most ecologically valuable areas. Such oil-free areas should receive an official

status along with a license to precede preservation work, and should include

special requirements for the companies working in the field and certain opera-

tional limitations. The upper management of companies and government alike

must recognize that oil and gas alone cannot satisfy all the needs of the population

and that bioresources are of high and long-term value both to the local people and

the whole society.

282 E. N. Andreyeva and V. A. Kryukov

In terms of biological efficiency, the Barents Sea yields only to the seas of the

Far East. Stocks of bio-resources of the Barents Sea are in the lead among all

seas of the Arctic Ocean, and the extraction of fish in the Western sector

accounts for almost 85 per cent of that from all Northern basins. The use of these

biological resources plays a significant role in the national economy, and the

preservation of marine ecosystems is the responsibility of all adjacent countries,

especially Norway and Russia. The Southern part of the Barents Sea is the most

biologically valuable, with diverse fish resources presented by cod, Atlantic

salmon, capelin, flatfish, haddock, herring, pollack, etc. However, the fish

resources have been overexploited for many decades, which has brought about a

considerable reduction in extraction. For some years, a critical and even a cata-

strophic situation with cod and capelin populations were registered (Skjoldal,

1991; Hansen, Hansson and Norris, 1996; Matishov and Rodin, 1996; Alekseev,

1999). Maintenance of biodiversity, particularly for the commercial and valuable

fish populations, is a common and very persistent problem for all countries of

the Arctic region.

In addition to the conservation challenges, Russia is currently struggling with

regeneration of its fishing industry. The Murmansk region possesses a sufficient

resource base, and a large proportion of the local population is involved in the

industry. Among the factors hampering the regeneration of fisheries are the ineffec-

tive national system of licenses and permissions, along with ministerial mistakes

that put a spoke in small fishing units’ wheels. The laws that have been passed into

the legislative system during the last 3–4 years have created such unprofitable

conditions for the fishermen that they are forced into searching for ways to get

around the law. In turn, fishermen that have been using the same fishing spots for

decades currently suffer from poaching on a massive scale. Usually, poachers come

from urban settlements or military bases and, in contrast to the locals, are stocked

with modern technological equipment, including helicopters and off-road vehicles.

The main conflict in the use of local resources is expected to take place

between the oil and gas industry and the branches of traditional subsistence using

renewable resources, such as fishing, hunting and trapping. There are reasons to

assume that the oil and gas development together with the acceleration of

shipping along the coasts and offshore, as well as the construction of industrial

infrastructure, will cause many negative impacts on the biological system of the

Barents Sea. First, the existing experience of hydrocarbon extraction in other

areas of the world, including the Russian North, shows that transport by pipelines

or tankers brings about the contamination of marine ecosystems, causes different

mechanical disturbances and changes habitats and ways of migration of marine

biological populations. Second, the analysis of oil spills confirms that their occur-

rence is very high due to severe natural conditions: low temperatures, storms, ice

movements and strong winds (The precautionary approach to north sea fisheries

management, 1997).

It is important to mention that oceanographic research on movement of marine

waters along the coast has shown that the direction of flows goes from West to East,

and that any contamination will eventually move from Varanger fiord to St Nose.

The Russian model 283

Because of the decrease in the water depth, contaminants are accumulating on the

East side of the Murmansk coast and are not penetrating far into the sea. Third,

and most importantly, the industry lacks experience of working under such

complex natural conditions. This experience is lacking not only in Russia but also

in other countries, even those that already perform offshore, and the conditions in

the Russian Arctic are more severe, more complex and unpredictable.

Concluding remarks

The issues of regional socio-economic development dominate the contemporary

discourse surrounding the sustainable development of the Arctic oil and gas

resources in the Russian context. Undoubtedly, the federal level is the dominant

‘player’ among the stakeholders working on development of the Northern fields.

The presence of Russia in the Arctic North is considered to be one of the major

priorities of the state. Thus, the nature of present political orientation often domi-

nates the discourse. While all the decisive and legislative power of the oil and gas

resources development in the Russian Arctic is concentrated at the federal level,

the participation at the regional level is limited to conditional participation. Regions

can decide independently on the usage of land resources in laying pipelines and

construction of terminals, but the principal decisions of ‘go/no-go’ character are

centralized at the top. Representatives of constituent entities of the federation are

members of the corresponding commissions in accordance with general practice.

At the same time, the federal government has transferred a significant part of its

decisive power to the largest Russian oil and gas companies, such as the

JSC Gazprom and the JSC Rosneft. The lack of state rules and regulations

concerning the conduct of oil and gas operations in this situation seems to be

compensated by the corporate rules and regulations.

Thus, both the paternalistic and the corporate approach are being realized in

the development of oil and gas resources of the Russian Arctic. Starting in 2007,

the regional budgets of the constituent entities of the Russian Federation were

deprived of the opportunity to receive a tax deduction on the lease of the land to

the oil and gas companies. This means that the only role the regions will have in

the development and implementation of oil and gas projects will primarily consist

of receiving indirect benefits from the activity of oil and gas companies, service

center enterprises and the manufacturers of equipment for the industry.

According to this scenario, the territories of the Russian Arctic will not be able

to receive tax breaks and payments needed for diversification of the regional

economy through the usage of their own resources (e.g. rehabilitation of the

fisheries). In quite the same manner, the decisive power of the municipal level and

the organizations expressing interests of the native minorities of the North is

reduced to simply receiving certain indemnifications for possible damages to the

environment or the living conditions of the population.

As a whole, it is important to emphasize that there are more problems than

solutions to the issues of the hydrocarbon resources development in the Arctic Russia.

Several regulation systems on usage of the subsurface resources are lacking;

284 E. N. Andreyeva and V. A. Kryukov

opinions and interests of various groups of the population are rarely heard,

and technical competencies for sustainable implementation of the projects are in

short supply.

Hence, the approach to sustainable development that is currently being imple-

mented in Russia is hardly an exhaustive one in the economic, ecological or social

terms. There are several fragments of the system, which should be further

integrated into the ultimate framework of an integral sustainable approach.

Notes

1 The authors express their thanks to Yelena A. Borkova, Candidate of Economic

Sciences (Novosibirsk), for her assistance in collecting and preparing the source data

for this chapter.

2 Yershov, Y. (2006) ‘Russia’s oil and gas sector in a globalizing world’, Oil of Russia, (4).

3 All-Russia Oil Research Geological Exploration Institute, Institute of Oil and Gas

Geology under the Siberian Branch of the Russian Academy of Sciences, All-Russia

Scientific-Research Institute of Natural Gases and Gas Technologies and others

(see e.g. Oil of Russia, 2004 (4): 8, and (7): 20; Mineral Resources of Russia.

Economics and Management, 2002 (4): 12–20).

4 Ragner, C. L. (2000) The 21st Century – Turning Point for The Northern Sea Route?,

Dordrecht: Kluwer Academic Publishers.

5 In the 1960s and 1970s, these giant fields were designed individually. With a more

complex approach, both the arrangement of the cities, and the infrastructure of the

fields would have been different, more rational. Within the framework of the projects,

the city of Nadym and the settlement of Pangody were founded close to the

Medvezhye field’s surface construction. The city of Novy Urengoi was also built close

to the Urengoiskoye field. As a result, JSC Gazprom is still financing the maintenance

of these settlements and their related social infrastructure. Some of these expenses can

be transferred to regional and municipal budgets, but the local and regional authorities

are not ready to bear this burden because of a shortage of means.

6 Kovalchuk, V. (2003) Social–Economic Partnership of the Local Authorities and

Natural Monopolies for the Sake of Sustainable Development of the Region – Problems

and Prospects of the Usage of the Low Pressure Gas, Materials of the scientific-pratical

conference 10-13 March, 2003, Nadym, JSC Gazprom-Russian Academy of Sciences.

7 Hill, F. and Gaddy, C. (2003) The Siberian Curse. How Communist Planners Left

Russia Out in the Cold, Washington, DC: Brookings Institution Press.

8 Kommersant, December, 2006.

9 Grivach, A. (2007) ‘And welcome again’, Vremya Novostey, January 29.

10 Spoken by Russia’s President Vladimir Putin when interviewed by Mexican publisher,

Mario Vazquez Rana.

11 http://www.barentsobserver.com/index.php?id=388437&cat=16285&xforceredir=

1&noredir=1

12 Bekker, A., Surgenko, V. and Derbilova, E. (2007) ‘Shelf for two persons’, Vedomosti,

22 January.

13 Derbilova, Y. and Borisov, N. (2005) ‘“Surgutneftegas” will occupy itself with the

shelf. It intends to develop it together with “Statoil”’, Vedomosti, December 5.

14 Surzhenko, V. (2006) ‘“Surgutneftegas” stops saving up. The company will spend its

savings on development of East Siberian fields’, Vedomosti, June 15.

15 Smolyakova, T. (2006) ‘Nefterazdel – Russia loses hundreds of billions of dollars in

case of old PSA contracts’, Rossiakaya Gazeta, October 21.

16 Gorshkova A. (2006) ‘Transparent indications’, Vremya Novostey, October 21.

The Russian model 285