Is three a crowd? Chinese and Japanese resource strategy in the Russian Arctic.

Timothy MagnerMA Candidate, Fletcher School of Law and Diplomacy

Arctic Frontiers January 23, 2015Tromsø, Norway Center for International Environment and Resource Policy

Overview

Russia’s shift to East Asia …

Development in the Russian far east …

Impact of low oil prices …

A land without a people, for a people without land?

Source: Satoshi Kambayashi, The Economist

Russian exports by country (2013)

Europe

Asia

Source: World Bank, MIT,

Japan (next in line? …)

Abe: First Japanese PM to visit Russia in 10 years (April ‘13) …

First ever Japan-Russia 2+2 talks (Nov ‘13) …

Russian Arctic Resources …

No Development

“Arctic Creep” continues

High-risk Chinese/Asia Arctic

investment

Western IOCs position …

But no Development

WesternSanctions

Crippling

Repealed

Oil Prices HighLow

Pre-Sanctions

1H 2014

Today

Risk increases as best-in-class, i.e.

Western, firms are unable to operate

Source: Rystad Energy 2014

Arctic

Project Name LocationBreak-Even Price

($/barrel)

BP Liberty Beaufort Sea $109

Amauligak Beaufort Sea $113

ENI Goliat Barents Sea $95

Johan Castberg Barents Sea $85

Bakken Field North Dakota $65

Sample Arctic Break-Even Development PricesBreak-Even Prices for Non-producing Assets

Thank you.

Center for International Environment and Resource Policy