Issue of Accumulation and Redistribution of Oil and Gas Rental Income in the Context of Exhaustible Natural Resources in Arctic Zone of Russian Federation

Abstract

The significant resource potential of the Arctic has attracted the attention of its adjacent countries and extra-regional states. The mineral and raw material base of the Arctic Zone of the Russian Federation (AZRF) comprises a wide range of minerals. However, due to its hydrocarbon reserves, the Arctic is considered to be the most important geopolitical and geo-economic macro-region for Russia. A significant portion of the Arctic hydrocarbons (about 19%) is concentrated in the territory of Russia’s shelf. The extraction of Arctic marine oil and gas resources and ensuring the sustainability of the Russian energy complex depend significantly on the level of Arctic development. Thus, the pace and quality of the development of AZRF are strategically important to ensure the national interests of the country. It has been proven that the implementation of the state program for AZRF development and strategic plans of the largest companies operating in the region consolidate the raw material nature of AZRF development. Rent becomes the main form of income. This article addresses the main directions of the region’s development and the factors that prevent a high level of industrialization, which increase attention to the withdrawal and redistribution of rental income. The article considers the Russian and foreign experiences of withdrawal and redistribution of oil and gas rental income, and analyzes the level of socio-economic development of AZRF. The authors suggest a methodology for assessing the impact of a country’s area and population size on the ability to achieve a high income due to hydrocarbons. The authors also explain the principles of rental income redistribution in the region as a basis for improving the level of AZRF’s socio-economic development and as a condition for transition from the “colonial model” of development to the “sustainable development” model. The study results can be used to elaborate a mechanism for rental income redistribution in AZRF and state programs for the region’s development.

Keywords

• the Arctic Zone of the Russian Federation
• oil and gas resources
• Arctic shelf
• rent
• sustainable development