JD Supra published an article titled, “Russia Moves on the Regulation of its Arctic Continental Shelf Resources.” The article reads in part as follows;
“In the course of the meeting held in September 2016 between President Putin and the Russian government, Mr Sergey Donskoy, the Minister for Natural Resources and the Environment, announced that it had been decided to impose a temporary moratorium on the issue of new appraisal, exploration and development licences in the area of the Arctic continental shelf. No timing has been attributed to the length of this moratorium but it would usually be expected that a significant revision of the regulatory regime and the licensing process to follow could take at least a year.
This development is significant because it suggests that the Russian government would like to prepare the way for a new assessment of the potentially significant oil and gas resources to be found on Russia’s Arctic continental shelf. An immediate effect of the moratorium is that it will prevent the accumulation of more licences that their holders intend to bank rather than to develop in the short term.
The Russian government has not issued any new Arctic shelf licence that have been publicly disclosed since August 2016 as evidenced in an official register of Russian Geological Fund1, however there has been some reported competition for the same licence areas by Rosneft and Gazprom in the past year. Russian law currently permits the Russian Government to only grant new Arctic shelf licenses to two companies, Rosneft and Gazprom2 , which between them hold over 90% of such licenses3. One purpose of the new regulatory regime would therefore appear to create greater competition, including as between Russian companies, in order to secure a better return for the Russian government, not just in terms of investment but also in terms of the supplemental licence conditions that it will be able to secure, being the additional obligations that a licence in Russia will typically contain4.”