Russia Should Increase Hydrocarbon Production While There Is Demand
Russia will only be able to maintain its position as a major oil and gas supplier if it starts developing its Arctic fields. This goal is stipulated in the exploration and mining program until 2030. But Prime Minister Dmitry Medvedev warned that “every 50-70 years the world experiences an energy revolution, and nobody knows where we will land with our hydrocarbons in the future.”
Dmitry Medvedev said the development of the Arctic shelf is a strategic goal because it is estimated to contain up to 25 percent of the world’s shelf hydrocarbon reserves. However, the structure and volume of Russia’s Arctic shelf reserves have not been assessed and their development is hindered by the lack of infrastructure, a social base and funding, he said. The prime minister proposed using public-private partnership mechanisms and modern investment projects to pursue the issue.
Dmitry Medvedev said Russia should increase oil production from 13 million tons (95.6 million bbl) in 2011 to 66.3 million tons (487.3 million bbl) in 2030, and gas production from 57 billion cubic meters (2.01 trillion cu f) to 330 bcm (11.65 trillion cu f). The economic effect should exceed 9 trillion rubles ($277 billion).
Natural Resources Minister Sergei Donskoi said the Arctic and Far Eastern shelf could contain up to 150 billion tons (1.1 trillion bbl) of oil equivalent. Key tasks include the careful assessment of these deposits and the development of industrial and social infrastructure.
However, Economic Development Minister Andrei Belousov believes that the expensive 18-year program would only increase hydrocarbon production by 10 percent. Worse still, foreign investors have little incentive to finance exploration projects because if they find new deposits, they will have to bow to state-run Gazprom and Rosneft to get a stake in them.
Deputy Prime Minister Arkady Dvorkovich, who is responsible for the energy sector, said a draft of the program is almost finished. Dmitry Medvedev ordered him to finalize it within two or three months. “We must start working now, not in 2030, all the more so since we know that our competitors, all shelf developers, are working much more quickly than we are,” he said.
RusEnergy partner Mikhail Krutikhin said the program has both strong and weak points. On the positive side, it amends the current legislation to allow more companies to conduct exploration on the shelf. So far, only Gazprom and Rosneft can do it. “The program is aimed at changing that situation, but unfortunately, this requires a change in legislation, and no one is planning that as far as I know,” Krutikhin said.
The program’s weak points include the high cost of oil and gas production at the Shtokman and Yamal fields, which means that the price could be prohibitively high for Europe. There are many other companies that are able to sell gas two or three times cheaper than Gazprom, the expert said.
Kremlin Prepares to Change State Duma Election Bill
The State Duma lower house has gone into recess, forgetting to adopt a presidential deputy election bill. In the autumn, it could be altered beyond recognition.
One of Dmitry Medvedev’s major initiatives as president was a law on the State Duma elections to reform Russia’s political system. However, this law “got stuck” in the lower house of parliament. The president submitted it in February but it failed to pass even its first reading. It proposed that Russia’s territory is divided into 225 territorial units, each one electing two parliamentary representatives. The federal section of the party ticket would be scrapped.
According to the schedule, MPs were supposed to consider it in April after collecting regional comments. But by March 27, only the Tomsk legislature had given the bill a thumb-up. The other regions, according to an Izvestia source in the State Duma, were unhappy with it.
All the parties disliked the presidential initiative, hence the bill has not gone forward, say Kremlin sources.
There was discussion of withdrawing it altogether on the Duma sidelines. Vadim Solovyov, deputy head of the parliament’s committee on constitutional legislation, did not rule out in his interview with Izvestia that the draft could be totally recalled.
“It has many pitfalls for United Russia, for example, how it is bound to the constituencies. They will draw up a new version, and what it will be like is anybody’s guess,” Solovyov said.
But a Kremlin source assured Izvestia that a new bill was out of the question. All changes will be made under the close eye of the opposition, taking its proposals into account. This was the promise President Vladimir Putin made to the Communist Party, LDPR and A Just Russia at a closed meeting with Duma parties on July 19, Alexander Ageyev, first deputy head of the constitutional legislation committee, told Izvestia.
“We proposed calling back the law at our meeting with the president. But he disagreed. We decided to set up a commission made up of parliamentary parties and discuss it in the autumn. Putin said he was ready to make concessions and changes and suggested we prepare our remarks for the second reading. He promised he would not let us down,” Ageyev said.
In fact, the Kremlin must proceed based on the proposals put forward by parliamentary parties. According to the deputies interviewed, the main proposal concerns the federal aspect of the ticket. To put it simply, the parties want to leave “the celebrity faces” at the top of the list. They also want to be able to recall any unwanted deputy – the so-called “floating” or imperative mandate.
“The floating mandate is unlikely to be included in the bill amendments, judging by the haste in which deputies turned down a separate law on it. But a federal ticket may be voted through, because we need to develop the party system and mark out party leaders,” said Mikhail Remizov, President of the Institute for National Strategy.
Newly Registered Opposition Party Plans to Stage Protests in Moscow
The Republican Party of Russia – Party of People’s Freedom (RPR-Parnas) has been registered by Russia’s Justice Ministry, the ministry’s website reported on August 2.
The three leaders of the newly registered party, Boris Nemtsov, Mikhail Kasyanov, and Vladimir Ryzhkov, are known as harsh critics of the government and have been involved in numerous street protests. In 2010, they co-chaired the Party of People's Freedom for Russia without Lawlessness and Corruption (Parnas), which failed to obtain official registration.
Unlike other newly established parties, RPR-Parnas lacks a single leader, with power being evenly distributed between Ryzhkov, Kasyanov and Nemtsov, who act as the party’s co-chairs.
According to Ryzhkov’s assistant Vladimir Romanov, the party has some 3,000 members. Membership is set to increase significantly, as people have been actively joining the party, Romanov said. Mikhail Shneyder, the executive director of the party’s governing council, says that close to 45,000 members of the old Parnas are expected to join the newly registered party.
Mikhail Kasyanov has already declared that the party will participate in regional and municipal elections and will continue to insist on early presidential and parliamentary elections in Russia. It will seek to limit the president’s powers, and wants the government to be appointed by a parliamentary majority and to report to the State Duma rather than the president. Other demands include a return to the mixed system of parliamentary elections (with 225 deputies elected through a majority system, and the remaining 225 – through a proportionate system) and the right to create electoral blocks.
Boris Nemtsov believes that staging protests is the party’s foremost priority. “Without street protests, we won’t be able to change anything,” Nemtsov said. The party’s first protest is scheduled for August 19 outside the Russian Government House. About 1,500 protesters are expected to participate. “We don’t need large numbers, as it is mainly a symbolic action to mark the events that launched the democratic movement in Russia,” Nemtsov explained. He said that RPR-Parnas will take part in large street protests that are scheduled for the coming autumn. The party is waiting for the end of the summer holiday season to announce its action plan.
However, a focus on street protests will hardly win people’s sympathies for the party. Liberals make up the smallest segment of the protest vote, said Vyacheslav Nikonov, President of the Politika Foundation . “So far, the party’s demands are not being well received by the public.”
“Polls suggest that they can count on up to 2 percent of the vote,” said Igor Bunin, Director of the Center for Political Technologies. The party’s soft spot is its leaders.
Of its three leaders, Ryzhkov is the most acceptable figure for the public. Voters have a positively neutral attitude to him, Bunin says. In people’s minds, all the three belong to the 1990s elite, which is a major disadvantage. The public wants to see a new elite, including among the opposition forces.
RIA Novosti is not responsible for the content of outside sources.