Y.K. Shafranik: «The development of Russia’s far east should be the world’s unprecedented economic project» (russian Business Guide, November 2006).

I THANK LUCK THAT I WAS BORN AND GREW UP WHEN THE DEVELOPMENT OF WESTERN SIBERIA’S OIL AND NATURAL GAS COMPLEX WAS IN FULL SWING. WHEN I WAS A STU DENT I REALIZED THAT I CANNOT LIVE WITH OUT THE NORTH AND A REAL CAUSE. I HAVE ONLY ONE FORMULA IN MY BUSINESS AND LIFE: THE RESULT
I will say nothing new if I repeat the statement that Eastern Siberia and the Far East is Russia’s mineral and energy potential, which currently lacks developed infrastructure. The construction of the Eastern Siberia-Pacific Ocean pipeline will create first real conditions for the improvement of this situation.The world’s leading experts forecast that oil consumption will be growing rapidly, especially in Asia-Pacific, and reach 5.2 billion metric tons in 2020 as compared to 3 billion in 2000. Most optimistic forecasts put the increase of oil con sumption to 600 million metric tons in China, which produces only some 200 million metric tons.
Russia will need changes in the re production of its mineral base and the organization of large-scale survey ac tivities in order to ensure oil and gas exports. Geological survey will need investments worth at least $14 billion, including some $3 billion on Sakhalin to ensure oil production in Eastern Siberia and the Far East at 80 million metric tons until 2030. The eastern regions lack the necessary infrastruc ture for the achievement of this goal. But favorable conditions on the world energy market allow Russia to reform the economy in the region and the country as a whole. Rich resources of high quality oil create a basis for the construction of major oil refineries and petrochemical plants with a capac ity of some 50 million tons, especially to satisfy the demands of Asia-Pacific. Moreover, natural gas in Eastern Sibe ria and Yakutia contains many valuable components, which can be supplied to world markets as final products after its refinery. Major energy and mineral development projects in Eastern Sibe ria and the Far East can boost activities and demographic growth and attract foreign workforce to the region. The scale of work in this sphere is large and the government should elaborate a program for the development of the oil, gas, petrochemical and chemical industries in Eastern Siberia and the Far East. The program should be sup ported by serious socio-political reso lutions. A complex approach should be applied to the developing of the Russian east, just as it was in Western Siberia.
The creation of an oil and gas complex in Western Siberia in the 1970s was a grandiose project of the 20th century.
It was a project of unprecedented eco nomic and geopolitical importance, which helped resolve the development problem in the short est terms. A new huge hydrocarbon production region with major material-technical and finan cial resources ap peared in the world as a result.
The eastern project should be considered in the same context today. No company in the world can implement it alone. This can be done under the auspices of several states. An educatory example of effective management solution in the history of the Soviet Union was the creation of the Northern Sea Route administration in the 1930s. The Unit ed States, Canada and other countries have similar examples of managing huge production territories. This experience should be used.
The international participation in ter ritorial development should imply the creation along Eastern Siberia’s borders of a massive belt of strategic resource projects involving European, the U.S., Chinese, Indian and other companies. In my opinion, this is an important issue of socio-economic re production and life in Russia and other countries.

Y.K. Shafranik: Russian Business Guide, November 2006.