Economic Effects of the Arctic Continental Shelf Development

Abstract

This paper discusses the possible risks and economic effects of the projects of exploitation of the Arctic continental shelf, in particular, of the oil and gas field development. The relevance of the study is due to the fact that the Russian oil industry may lose about $1 trillion of investments from 2015 to 2045 years because of the economic and political sanctions imposed in 2014. Because of that, the losses of the country budget revenue are estimated about 27÷65 billion dollars until 2020. The main positive effects of the Arctic shelf development are assessed in the article: political (confrontation with major players in the world, which are also interested in the development of the Arctic shelf), economic (possibility of finding additional resources and attracting investment and implementing international projects) and socio-economic aspect (creation of new working places in framework of the Arctic exploitation and obtaining additional funding for regional programs for the development of the Arctic and nearby regions). Economic risks are also evaluated; in particular, the problems of organizing work in the Arctic and the costs of implementing projects for the Arctic shelf development; the ratio of the possible costs of implementing these projects and economic benefits was calculated.