New law would allow only Russian-flagged ships in Russian Arctic

An icebreaker in the Kara Sea in April 2015. (Kirill Kudryavtsev/AFP/Getty)
An icebreaker in the Kara Sea in April 2015. (Kirill Kudryavtsev/AFP/Getty)
A new law might force shipping companies to sail in the Arctic only under Russian flag.

New legislation under elaboration by the Ministry of Transport proposes to significantly restrict shipping with petroleum products in Russian Arctic waters. If adopted, the law will prohibit companies to export Russian Arctic oil and gas with foreign-registered ships. The ministry also considers to ban Arctic oil shipping with vessels not built in Russia, a source close to the ministry tells newspaper Kommersant.

Response to West?

The bill can be seen as a response to western countries’ sanctions against the Russian Arctic oil industry, the newspaper reports. Those sanctions are hitting hard on Rosneft and Gazprom which both are dependent on western know-how and technology for complex Arctic field developments.

Rosneft has announced that it is postponing several planned well drilling operations. Similarly, it has got permission from federal authorities to extend field license terms in several Arctic projects with up to two years.

Effect on domestic shipping companies

The law is however likely to create far more damage to Russian stakeholders than to foreign shipping companies.  Even Russia’s biggest shipping company Sovcomflot has most of its ships sailing under foreign flags. Also the company’s new LNG carriers are all planned to be registered abroad. And the Russian shipbuilding industry is not yet ready to take on the construction of the number of ships needed.

The new Zvezda yard outside Vladivostok, the country’s future shipbuilding hub, will be ready to take on construction of large-scale tankers only after 2018.

Related stories from around the North:

Asia: Asia ahead on preparing for polar climate change, says U.S. Arctic rep, Eye on the Arctic

Canada:  Arctic drilling doesn’t just effect the Arctic say Greenpeace campaign participants, Eye on the Arctic

China: China’s silk road plans could challenge Northern Sea Route, Blog by Mia Bennett

Denmark: The Continental Shelf – Geological, legal or geopolitical?, Blog by Mia Bennett

Greenland:  Mapping and distorting the Arctic, Blog by Mia Bennett

Norway:  China eyes Arctic Norway infrastructure projects, Barents Observer

Russia:  Russia plans to increase Northern Sea Route capacity, Barents Observer

United States:  U.S. to collect Arctic data for modern navigational charts, Alaska Dispatch News

Atle Staalesen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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