“Catastrophic” economic situation prompts merger talks for two Russian regions in Arctic

Alexander Tsybulsky, acting governor of Arkhangelsk Oblast (left) and Yury Bezdudny, acting governor of the Nenets Autonomous Okrug (right) ,at the meeting on Wednesday in the city of Naryan-Mar where they signed a memorandum of understanding on merging their two regions. (Government of Arkhangelsk Oblast)
The Arkhangelsk Oblast and the Nenets Autonomous Okrug (NAO) in Russia’s northwestern Arctic announced on Wednesday in joint news releases they are planning to merge.

Describing the economic situation in the NAO as “catastrophic” as COVID-19 continues to cause the bottom to fall out of the oil industry, the two regions said a merger would allow them to better respond to the economic crisis. 

COVID-19 has left the oil industry reeling since the pandemic began because of everything from travel restrictions, to the disruption of supply chains, to price wars.

‘Standing on the edge of a financial abyss’

Ninety per cent of the NAO’s budget depends on oil prices and with no end to the pandemic in site, joining into a single entity could provide an economic buffer, the governments said.

“In the context of the evolving international economic crisis, there’s basically no chance that a miracle can happen,” said Yuri Bezdudny, the NAO acting governor.

Bezdudny said the NAO’s budget was calculated on oil prices of $57 US a barrel.  With current oil prices at around $25 US a barrel, he said that the NAO was “standing on the edge of a financial abyss” and could likely only make it to July 1 before budget constraints started to impact services.

Will merger lure investment?

The acting governor of Arkhangelsk Oblast, Alexander Tsybulsky, said uniting the two regions would improve prospects for Arctic development in the long term. 

“We’ll be able to get completely different development opportunities with the NAO , together we can attract larger investments – both public and private.”

A memorandum of understanding was signed in Naryan-Mar, the administrative centre of the NAO, on Wednesday. 

The news release said working groups had been set up and there would be public consultations before the merger went through, as well as referendum.

The population of the Nenets Autonomous Republic is approximately 44,000. It already has several administrative links with the Arkhangelsk Oblast, which has a population of around 1.1 million people. 

Write to Eilis Quinn at eilis.quinn(at)cbc.ca

Related stories around the North:

Canada: Inuit orgs welcome Canada’s support of heavy fuel oil ban in Arctic waters, Eye on the Arctic

China: Gazprom to build new pipelines between Arctic Russia and China, The Independent Barents Observer

Finland: Finland investigates oil leak risks from Baltic Sea shipwrecks, Yle News

Iceland: Iceland to restrict heavy fuel oil use in territorial waters, Eye on the Arctic

Norway: Plenty of more oil in Barents Sea, says Norwegian petroleum authority, The Independent Barents Observer

Russia: Arctic oil plans in Norway and Russia disrupted amid COVID-19 crisis, The Independent Barents Observer

United States: Wells Fargo becomes third major US bank to nix Arctic oil investment, Alaska Public Media

Eilís Quinn, Eye on the Arctic

Eilís Quinn is an award-winning journalist and manages Radio Canada International’s Eye on the Arctic news cooperation project. Eilís has reported from the Arctic regions of all eight circumpolar countries and has produced numerous documentary and multimedia series about climate change and the issues facing Indigenous peoples in the North.

Her investigative report "Death in the Arctic: A community grieves, a father fights for change," about the murder of Robert Adams, a 19-year-old Inuk man from Arctic Quebec, received the silver medal for “Best Investigative Article or Series” at the 2019 Canadian Online Publishing Awards. The project also received an honourable mention for excellence in reporting on trauma at the 2019 Dart Awards in New York City.

Her report “The Arctic Railway: Building a future or destroying a culture?” on the impact a multi-billion euro infrastructure project would have on Indigenous communities in Arctic Europe was a finalist at the 2019 Canadian Association of Journalists award in the online investigative category.

Her multimedia project on the health challenges in the Canadian Arctic, "Bridging the Divide," was a finalist at the 2012 Webby Awards.

Her work on climate change in the Arctic has also been featured on the TV science program Découverte, as well as Le Téléjournal, the French-Language CBC’s flagship news cast.

Eilís has worked for media organizations in Canada and the United States and as a TV host for the Discovery/BBC Worldwide series "Best in China."

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