The Moscow Times noted the decision was made under pressure from a consortium of foreign investors—possibly from India and China—who warned they would not invest in Vostok Oil without the new tax breaks.
Russia is at the forefront of exploration and extraction in the Arctic, where melting sea ice is rapidly opening up new sea lanes and natural resource deposits. Russia boasts some 15,000 miles of Arctic coastline—almost half of the total—putting it in pole position to exploit and control the region.
The U.S. Geological Survey has estimated there are some 412 billion barrels of oil under the Arctic, with some 22 percent of the world’s total oil and gas supplies located there. Valuable mineral resources also abound, including phosphate, bauxite, diamonds, iron ore, silver, copper, zinc and gold.
Russia faces competition from fellow Arctic nations Canada, Denmark, Finland, Iceland, Norway, Sweden and the U.S. There are also environmental concerns that extraction activity could irreparably damage the Arctic environment.
China is also keen to get in on the action, recently declaring itself a “near Arctic” nation. Last year, Beijing revealed plans for a “Polar Silk Road” route running through the region, as well as associated infrastructure and shipping lanes through the warming waters.
Russia is also remilitarizing the region, reviving abandoned Soviet-era bases and investing huge sums to Arctic-proof its armed forces. U.S. military officials have warned that the Pentagon is badly lagging behind, exemplified by the gulf in the strength of the two countries’ ice-breaker fleets.
Moscow currently has at least five operational icebreakers, compared to America’s two. And by 2035, Putin wants Russia to be operating at least 13 heavy-duty icebreakers of which nine will be nuclear-powered.
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