A proposed new law may require from shipping companies sailing in the Arctic to do so only under Russia’s flag.
According to a new Ministry of Transport legislation that is currently being elaborated on, petroleum product shipping in Russian arctic waters might be significantly restricted. If the law is to be truly adopted, it is going to prohibit companies from exporting Russian Arctic oil and gas with the use of foreign-registered vessels. The ministry is also considering to impose a ban on Arctic oil shipping operations with ships that were not constructed in Russia, according to a source close to the ministry.
The bill in question may be viewed as a sort of a response to the sanctions against Russia’s Arctic oil industry that were coordinated by western countries. The sanctions in question are affecting negatively Gazprom and Rosneft which both depend on western know-how and technology for the purposes of highly-complex developments of the Arctic field.
Rosneft has come out and made an announcement that it will be postponing a number of its well drilling operations. Federal authorities have also granted the company permission to extend its field license terms in a few Arctic projects by a maximum of two years.
The new law, however, will more likely negatively impact on a larger scale Russian stakeholders than it will foreign-based shipping companies. Even Sovcomflot, which is the largest shipping company in Russia, has the majority of its vessels sailing under a foreign flag. Additionally, all of the company’s brand new LNG carrier vessels are to be registered abroad according to initial plans. Adding to the case is the fact that Russia’s shipbuilding industry does not have the capacity yet to cope with the potential demand level regarding new ships.
The brand new Zvezda shipyard that is located outside Vladivostok, Russia’s future shipbuilding hub, is going to be able to handle large-scale tanker construction only after 3 years, in 2018.