Russia 110505 Basic Political Developments

The status of the Caspian Sea

http://rt.com/politics/press/rossijskaya-gazeta/caspian-sea-russia-development/en/
Published: 5 May, 2011, 03:14
Edited: 5 May, 2011, 03:14
Galina Godunova, Larisa Ionova

Russia considers the Caspian Sea to be a unique inland reservoir and “objects to the division of its aquatic area into national sectors.”

The legal status of the Caspian Sea remains uncertain. This important topic was raised at a meeting of the Maritime Collegium in Astrakhan by its chairman, Deputy Prime Minister Sergey Ivanov.

Meanwhile, certain types of resources, including biological resources, are indivisible and call for coordinated action for their preservation by all Caspian-bordering states, as well as provision of guarantees of safe maritime navigation and business activity, especially in the sphere of prevention and elimination of the consequences of accidents related to oil production.

So far, attempts to conclude five-sided agreements have failed, said Sergey Ivanov. Activity related to the exploration of hydrocarbon deposits on the Caspian Sea shelf creates a strong foundation for the economic development of the entire region. According to the Russian Ministry of Natural Resources, the discovered oil reserves alone amount to 2.9 billion tons, and natural and petroleum gas reserves to more than 3.1 trillion cubic meters.

Today, on the Russian section of the Caspian seabed, ten new fields have been opened, which are able to provide an annual production volume of about 40 million tons of oil. Ivanov promised that oil and gas production on the Russian shelf of the Caspian Sea will be conducted exclusively using technology resulting in zero discharge into the aquatic area. He noted that he had visited drilling platforms and saw that no process fluids are drained into the water, and are instead placed in containers and transferred to the shore, where they are recycled.

This method is called the zero-discharge technology. The deputy prime minister recalled that the hydrocarbon reserves in the Russian section of the Caspian Sea shelf are estimated at 100-150 million tons of oil and 530 billion cubic meters of gas. The discovered reserves of the entire Caspian Sea shelf amount to 2.9 billion tons of oil and 3.1 trillion cubic meters of gas.

As for the issues relating to maritime navigation, in May the government plans to review a bill supporting the domestic shipbuilding industry, said the deputy prime minister. It’s no secret that many companies are ordering and repairing ships in other countries. This is not conducive to the development of our shipbuilding industry, and in order to save it, lawmakers, officials, and experts have, for a long time, been considering a draft law on shipbuilding.

Ivanov had expressed the hope that this long-awaited document, which provisions a number of measures to subsidize the industry’s development, will be presented in the government before the summer. It provisions budgetary subsidization of the interest rate on credit received for the construction of vessels, as well as other deductions conducive to the development of the shipbuilding industry in Russia.

“These economic measures are aimed at making it profitable for our ship owners to build vessels in domestic shipyards,” said the deputy prime minister.

Moreover, members of the Maritime Collegium had discussed the question of a comprehensive decision on the navigability of the Volga and the prospects of development of the international North-South Transport Corridor.

According to the Governor of the Astrakhan region, Aleksandr Zhilkin, for the whole of last year, the total cargo turnover of the Caspian ports amounted to about 54 million tons. The Russian share in this is only 11 million tons, or no more than 20 per cent.

The deputy transport minister, Viktor Olersky, said that in the ten years since the active promotion of the international North-South Transport Corridor began, “the potential of the corridor has been marginally utilized.”

According to Viktor Olersky, the corridor’s main advantages – speed and the cost of delivery – are offset by the overly long process of going through customs and the lack of flexibility in the tariff policy due to the discrimination of Russian courts in certain foreign ports due to the limitations of the Russian port infrastructure.

Viktor Olersky and Aleksandr Zhilkin both agreed that for the maximum utilization of the potential of the North-South Transport Corridor, the creation of which was initiated by Russia, it is necessary to promote the development of the Olya Port, making it the main Russian port on the Caspian transit routes.

Based on the dynamics of cargo handling at competing ports, the development of Port Olya alone will make it possible to stop the coming displacement of Russia from the Caspian Sea transport, said the governor. So as not to get forced out from the Caspian, we must multiply our efforts here.

Today, Kazakhstan, Iran, and Azerbaijan are working on the modernization of their ports and port infrastructure, in order to raise their cargo turnover rate by 15-20 per cent and become even more competitive.

According to the estimates of the Transport Ministry and the Astrakhan regional government, the completion of the construction of a second cargo district at Port Olya within the framework of the federal target programs “Development of the Russian transport system” and “The south of Russia” by 2014-2015, will give Russia an opportunity to seize the initiative in Caspian transit.

The capital investment volume into this construction has amounted to 17.5 billion rubles, while the total amount of expected investment into modernization of the planned capital investment projects is 33.5 billion rubles. Of this amount, only 4 billion will come from the federal budget – that is, for every ruble from the federal budget there are seven rubles of private funds, which confirms the investors’ high level of interest in this project.