A socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events.

The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, helps foster social entrepreneurship and charitable initiatives.

Each year, the Foundation’s events draw participants from 208 countries and territories, with more than 15,000 media representatives working on-site at Roscongress’ various venues. The Foundation benefits from analytical and professional expertise provided by 5,000 people working in Russia and abroad.

The Foundation works alongside various UN departments and other international organizations, and is building multi-format cooperation with 173 economic partners, including industrialists’ and entrepreneurs’ unions, financial, trade, and business associations from 78 countries worldwide, and 179 Russian public organizations, federal and legislative agencies, and federal subjects.

The Roscongress Foundation has Telegram channels in Russian t.me/Roscongress, English – t.me/RoscongressDirect, and Spanish t.me/RoscongressEsp. Official website and Information and Analytical System of the Roscongress Foundation: roscongress.org.

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News

Шельф России: Нужно ли его осваивать?

KEY CONCLUSIONS

The Russian Arctic has incredible resource potential

 “By 2035 our on-land extraction in traditional regions can go down significantly compared to today. Different estimates give us 50 to 100 million tons decline, depending on the year and potential fiscal support measures. It means that the shelf is going to replace our traditional regions,” Pavel Sorokin — Deputy Minister of Energy of the Russian Federation

 “What makes the shelf so unique and why would investors want to come here, given we provide something resembling favorable conditions <…>? Actually, it the presence of the resource potential that is in decline globally. Both the Arctic and the shelf attract with their resource potential,” Andrey Patrushev — Deputy Chief Executive Officer, Shelf Projects Development, Gazprom Neft

“Currently, we have 79 licenses for the shelf. Rosneft holds 31, Gazprom has almost the same number – 29, Gazpromneft has 5, and the remaining 14 are distributed among other companies. Since 2012, 46 licenses went to state companies. <…> Since 2012, three new deposits have been commissioned in the Arctic. Apart from the well-known Pobeda, it is Tsentralno-Olginskaya and Severo-Obskaya. Subsequently, the growth since 2012 resulted in 210 million tons of oil, 670 billion cubic meters of gas, and 16 million tones of condensate,” Denis Khramov — First Deputy Minister of Natural Resources and Environment of the Russian Federation 

PROBLEMS

The shelf is not thoroughly investigated

“When it comes to the degree of investigation. <…> It remains extremely uneven. The Barents Sea is best known in the Arctic with one and a half kilometers of the seismic survey per a square kilometer of area. For the Kara Sea it’s a half of that, whereas the East Siberian Sea is the least studied,” Denis Khramov — First Deputy Minister of Natural Resources and Environment of the Russian Federation 

High risks of shelf exploration

“In recent years, the mining companies regularly addressed the state about changing the licensing requirements. Business reported the unfavourable taxation regimen, lack of access to sea infrastructure construction subsidies, as well as outside factors like sanctions and currency exchange rate fluctuations. At the same time, global tendencies attest that starting the exploration the shelf projects in 2030s can make them uncompetitive in the market,” Magomed Gekhaev — Advisor to the General Director, Far East Investment and Export Agency

“Western countries carrying out projects in the Gulf of Mexico or in Africa get funds under 2–3%. They can get listed and get cheap money there. Our companies face global limitations and have to get funding <…> under 8–9% if there’s no state support. It doesn’t work. These are very long-term projects, the risks are too high for such rates,” Pavel Sorokin — Deputy Minister of Energy of the Russian Federation

SOLUTIONS

State support for shelf investment projects

“Our investors are not ready to cash out on these extremely risky projects basically under a promise as a guarantee. That’s why we need alternate financing tools: whether it’s co-financing, or differentiated breaks for explorations <…> Unfortunately, in order to attract investors to the unattractive territory we need to have some ‘honey’ to offer them,” Pavel Sorokin — Deputy Minister of Energy of the Russian Federation

“Recently, a number of changes have been introduced into the Tax Code that consolidates exploration expenses with extraction results in Prirazlomnaya with a 1.5 multiplier. Thus, the state stimulation for exploration reaches 30%. However, this mechanism only works for greenfield exploration. <…> First thing the state could do to stimulate extraction is cover the entire exploration field with 1.5 multiplier. <…> Second, <…> if we look at the experience of other countries that work their shelf – Norway, Brazil, China – we’ll see discounted financing to create the infrastructure around their fields. That would be a key step for us. <…> Next step we could implement <…> is labelling all Arctic shelf exploration projects as 4th complexity category,” Andrey Patrushev — Deputy Chief Executive Officer, Shelf Projects Development, Gazprom Neft     

 “To intensify the shelf exploration takes three main solutions. First is the development of competition. <…> Second is stimulus and regulation mechanisms required to fulfil the projects. <…> We suppose that the tax regimen needs to be changed for the shelf projects. The preference system we prepared takes that into account. <…> It includes spreading the 4th complexity category to the entire shelf without term expiration. We suppose that the state should intensify investments in technologies required to explore the shelf in particular and the Arctic in general,” Alexander Krutikov — Deputy Minister for the Development of the Russian Far East and Arctic  

Attracting investment to the development of the region

“President of Russia trusted us with the development of the Arctic zone on the Russian Federation. He pointed out three goals we need to achieve. First is raising the quality of life in the Arctic. 2.5 million of our compatriots live in rather grave conditions. Second is the economic development of those territories. <…> Third is a notable, sizeable increase in cargo transfer along the Northern Sea Route. <…> There is only one realistic way to achieve these goals. It’s attracting private investment to these territories. There are no funds available to flood the Arctic with money, thus improving the quality of life. <…> Private investment means jobs, improving the quality of those jobs, and growth of regional taxation base,” Alexander Krutikov — Deputy Minister for the Development of the Russian Far East and Arctic    

For more information, visit the Roscongress Foundation’s Information and Analytical System www.roscongress.org

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