Priorities of Russia’s Arctic policy

By Rimvydas Ragauskas

"To be honest, Russia is a northern country”, said Putin during the International Arctic Forum The Arctic: Territory of Dialogue which took place in September 2010. Potential energy and economy impacts of the Arctic changed the views of the Russian officials who now consider it as an important region not only to the economic welfare of the country but also to its status on the international stage. Demonstration of the Russian power in the Arctic Region and aggressive rhetoric has already attracted public attention.

On the other hand, Russia made some positive steps, i.e. defined the maritime border with Norway in the Barents Sea. What are priorities of Russian authorities and why Russia seeks to preserve a multi-vector policy in the Arctic zone?  Climate warming gives access to energy resources of the Arctic and opens new navigation routes. In Russia the vision of Arctic is presented as a strategic resource base of Russia (pursuant to The Arctic Strategy of 2008 this vision is to be implemented by the year 2020). Russia is determined to become a leading Arctic power, and, since it still has the longest maritime border with the Arctic and the most powerful fleet adapted to harsh climate conditions, this vision might be seem so naïve anymore.

Today the Arctic zone falls under the scope of the United Nations Convention on the Law of the Sea (1982). So far all the countries having borders with the Arctic agree with the principles of Convention, namely: Russia, Norway, Denmark/Greenland, Canada and the United States (the U.S. has not ratified but acknowledges the Convention).  The major concept of Convention is an exclusive economic zone (EEZ) extending 200 nautical miles from the shorelines. This zone might be extend up to 350 nautical miles if geological studies prove that continental shelf extends beyond 200 nautical miles from the shore.

In 2001 Russia made its claim for the extension of the continental shelf beyond 200 nautical miles, but then Russia’s submission was rejected. Russia claims that the Lomonosov, Mendeleyev and Alpha ridges are an extension of its continental shelf. If Russia manages to justify this, it could get about 1,2 million sq km of the ocean’s space, including the Lomonosov ridge rich with energy resources. But Canada and Denmark can also claim this ridge. We’ve heard already that these countries might submit joint application on the continental shelf. If Russia fails to “defend its rights” and extend the exclusive economic zone, this might lead to destabilisation of situation in the Arctic. Thus it is not clear yet on whether geological research or political consensus will play the main role in dividing this shelf.

Arctic assets has become the main goal of Russia and the country has already demonstrated its goodwill and determination.  In 2010 Russia and Norway have finally agreed on the Barents Sea border (the disagreement was mainly related to energy deposits in the disputed territory). The Agreement not only defines the Russian-Norwegian border in the Barents Sea, but also the principles of cooperation (via joint ventures) in order to make use of the underwater riches.

This is a very pragmatic decision, since Arctic zone will need huge investment and best technologies, and the experience of Norwegian company “Statoil” in constructing the wells in open waters might have huge impact on Russian energy projects. For Norway this is not only a possibility to start exploring and operating the “frozen” resource sector but also to increase cooperation of companies of the two countries in the entire Arctic Region. This could be evaluated as a positive step toward stability in the Region and consolidation of the status of a dialogue territory to the Arctic.

Another major event is a framework agreement between the oil giants Rosneft and British Petroleum (BP) signed in January 2011 regarding the exploration and further development at three prospective oil and gas areas on the shelf of the Kara Sea. The partnership is based on mutual cross-holding of shares: according to the deal, in exchange for 9.5% of its shares Rosneft is to receive 5% of BP shares. The parties also agreed to set up a joint venture and Arctic Technology Centre with the aim of developing and introducing advanced technologies for safe development of energy resources in the Russian Arctic continental shelf.

If case of a successful alliance of the two oil giants (today the deal is suspended because of TNK-BP claims), it could become a serious indicator in evaluating Russia’s moods regarding investment. BP, having become a major shareholder of Rosneft, realizes that it has taken also the potential political costs and the risk. BP, which suffered during the ecological catastrophe in the Gulf of Mexico, has become the first company to invest huge amounts of money to the Russian Arctic, but Gazprom and Rosneft  are also looking for the investors. Cooperation of BP and Rosneft is based on the exchange of BP’s technological progress and experience to an opportunity to get access to the Russian energy resources.

Another priority for Russia is consolidation of its status and development of the infrastructure of the Northern Sea route linking the Atlantic and Pacific oceans. This sea route is open only several months per year, but if the ice proceeds to melt, in ten years the duration of navigation might expand. International players disagree regarding the status of this sea route. According to Russia, the waters between the continent and northern islands are its internal waters, whereas the United States and other countries believe that these are international channels where transit regime should take precedence. Russia refers to Article 234 of the United Nations Convention on the Law of the Sea stating that all ships choosing to enter the Northern Sea route shall be registered (including the escort vessels) and also pay an ice-breaker fee. These regulatory procedures are applied irrespective of the status of the waters between the archipelago and the continent, and Russia is not the only one to apply this provision of the UN Convention.

Surely, Russia is mostly interested in the region’s energy potential, however, but the North Sea route is also important: this sea corridor might in principle shorten traditional distances between Europe and Asia (via the Suez Chanel and the Strait of Malacca). Although it is too early to speak about navigation in the Northern Sea route, its volumes have already increased. However, it will hardly become a solely commercial sea corridor. Harsh conditions require expensive technologies, icebreakers; moreover, more fuel will be necessary in harsh weather conditions. It is impossible to foresee ice melting or freezing. One year the route might be closed, the other opened. Besides, a massive increase in ship movements on the Northern sea route is least expected because of the ice drifts and unforeseeable weather. Thus, Russia’s priorities in the Arctic include: utilization of energy resources, investment and foreign partners, extension of boundaries of the continental shelf, consolidation of the status of the Northern Sea and development of its infrastructure.

Growing energy potential in the Arctic increase the activity of the Russian military air and maritime forces: Russia resumed the flights of strategic bombers, activated fleet manoeuvres, and in 2007 Russia has laid claim to the seafloor at the North Pole, planting its national flag underwater.The aggressive rhetoric on possible military defence of own interests reminded the world that Russia is a key factor of regional development. On the other hand, Russia’s actions attracted the attention of international community to the security dimension in the Arctic, and this is hardly useful for Russia.

From the strategic point of view, even after the end of the Cold War Russia is still interested in the Arctic. Russian nuclear strategy highlights the importance of the Northern fleet. Thus, if legal division of the region will not give good results, the importance of military forces in the region will increase substantially.

Commercial argument connects all Arctic states, whereas the economic region’s engine is its stability and reliability. Russia’s military actions have already increased NATO’s interest in the region’s security, however, Russia will consider active Alliance’s involvement in the region as a threat to security. According to president Medvedev, the Arctic can do without NATO and this region shall be the zone of peaceful national cooperation.

Arctic security is not only related to a military dimension. It is also related to the protection of nature, elimination of accidents, rescue and search services, information space etc. So far Russia declares its determination to cooperate with other states in improving the region’s infrastructure, but it is difficult to say what will happen in the future.

On the other hand, the future of the region cannot be predicted due to the fight of the classical competitors (the United States and Russia), whereas international cooperation in the Arctic will mainly depend on the relationship of the above two countries.

Russia realises that disorders in the region could cause major economic problems. The Arctic conditions are very complicated, thus, development of relevant infrastructure, assurance of an effective and secure use of energy resources will require a lot of time, including substantial investment. It is interesting: how wide Russia is going to open the door to foreign investors? Although the BP’s acceptance and Rosneft/Gazprom’s search for investors demonstrates the ambition to admit international companies in the sector of the Russian Arctic, the absence of the systematic change in Russia makes principle changes in the above sphere very doubtful.

It seems that in the Arctic Russia uses a strategy of two vectors, which, as it is expected, will bring the state to a win-win situation. “Soft measures” are used for the resolution of problems, i.e. for the enforcement of the legal regime of the UN Convention on the Law of the Sea, scientific justification of claims to the continental shelf, search for strategic partners and attraction of investment. Moreover, Russia doesn’t see what benefit NATO can bring to the Arctic.

If “soft” measures do not work, “hard” vector will “come to help”. The military arsenal in the region and occupied positions will become a strong argument in ascertaining the claims. The image of Russia as a privileged state in determining the future of the Arctic is in the national Russian identity, therefore it is hard to imagine that in case of unfavourable scenario Russia will refuse own claims.

In the classical contraposition East-West the Arctic was and still is sort of a northern border aimed at encapsulating and withholding the continental power. But 21st century has brought lots of innovations: the increased accessibility of the Arctic, energy resources, new fishing spaces and water routes can also change geopolitical status of Russia. If Arctic ice melt continues, Russia will manage to free from the geographic encirclement since the Arctic partially restricts Russia’s communication and commercial ties with the world.

Changes in the Arctic Region and “Russian factor” determined the joint security space ambitions of the Northern countries and discussions on the NATO’s role in the Arctic etc. Free from ice Arctic could correct (at least in summer) defensive national priorities or maybe even strategic suspension concepts, especially regarding possible regional contraposition of interests of the United States and Russia. Thus, a complicated conjuncture of political, economic, strategic and geographic factors makes the Arctic one of the most interesting regions and one of the key points in the agendas of international relations.