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Murmansk Oblast

Northwest of Arkhangelsk, on the Kola Peninsula, lies Murmansk, Russia's main port on its northern seas commercial route. The influence of the North Cape Gulf Stream also keeps the port open year-round, even though it lies 124 miles north of the Arctic Circle.

During the Cold War, the Kola Peninsula emerged as the basing area for Russia's most powerful fleet with the largest component of the Soviet Union's sea-based strategic forces. Naval and air forces operating from Kola posed a threat to Atlantic sea lines of communication (SLOCs) and provided the surface, subsurface and airborne forces to protect the north bastion of Russian strategic nuclear submarines (SSBNs). Soviet ground forces were of sufficient size and quality to threaten northern Norway, making that country the key to NATO's northern flank.

By 1946 the US Navy's postwar strategy was a "transoceanic strategy" which dominated the Navy's strategic planning into the mid-1950s. The concept called for forward offensive operations against the bases from which the Soviet threat emanated. These plans called for operations against air and naval bases in the Kola Peninsula in the far north, in the Crimea (via, in early periods of the war, staging bases in Turkey), in the Maritime Province, in the Kuriles, in Sakhalin, and Kamchatka (Petropavlovsk). The US Navy was not planning to attack the Kola in 1946 because it thought it had a good handle on Soviet submarines, but because it knew it did not have a good handle on Soviet submarines.

In the post-Cold War period, the importance of the Kola peninsula has changed. While the political boundaries in the Russian north have not changed as radically as in the Baltics, the geostrategic significance of the region has been transformed and security concerns recast. The decline of the Northern Fleet highlights the reduced military significance of the Barents area.

The Arctic Military Environmental Cooperation (AMEC) Program is a cooperative effort between the Kingdom of Norway, the Russian Federation, and the United States on solid radioactive waste (SRW) treatment and storage technologies in the Arctic for the Russian Navy. The use of Western technology and technologies jointly developed between Russia, the US and Norway will facilitate meeting Russia's needs for stabilizing and storing SRW from decommissioned nuclear submarines.

Murmansk Region is located on the Kola Peninsula, bordering Karelia Republic in the south and Finland and Norway in the west. Murmansk Region is washed by the waters of the Barents and White seas. The region is almost entirely situated beyond the Arctic Circle, but the port of Murmansk never freezes due to the warming effect of Gulf Stream. Being the only deep-water port in Northwest Russia, Murmansk plays a prominent role in exports of certain commodities, such as coal, non-ferrous metals and oil. The economy of the region is based on extraction of natural resources. The main sectors are fishing and fish processing industry, non-ferrous metallurgy, and chemical and mining industries. However, the future of Murmansk is being linked not only to its fishing, mining, non-ferrous and chemical industries, but to oil and gas extraction and processing, as well as to creation of transportation infrastructure (pipelines and oil terminals) to facilitate export of crude from West Siberia and Timan Pechora oil-bearing provinces. This report presents an overview of the Murmansk region and its economic prospects.

Murmansk Region is almost entirely located beyond the Arctic Circle. The maximum extension from south to north is 400 km (250 miles), and from east from west 500 km (312 miles). The polar night (i.e., when the sun doesn't show at all even during daytime) begins on 22 November and ends on 15 January, the polar day period begins on 18 May and ends on 24 June. The period when heating of houses is required is ten months per year. The east part of the Kola Peninsula is almost non-inhabited and has neither rail nor motor roads. It is mostly covered by swamp areas and tundra. The only way of transportation to rare small settlements is by helicopter, and in some instances by boat. The west part of the peninsula has some forests and a few motor roads connecting it with Finland and Norway. The shores of the Kola Peninsula are washed by the Barents and White Seas. The Gulf Stream reaches the city of Murmansk in the north and almost immediately turns back, leaving the remaining shores of the peninsula covered with ice throughout the long winters. However, the port of Murmansk never freezes and stays operational around the year.

The total population of Murmansk Region is 879,000 people, among which 95% live in rural settlements. The total area of Murmansk Region is 145,000 sq. km. The capital of the region is the city of Murmansk (337,000 inhabitants, or 37.7% of the total population of Murmansk Region). The city of Murmansk, initially entitled Romanov-on-Murman, was founded in 1916. Murmansk is the largest city in the world located beyond the Arctic Circle. The distance from Murmansk to Moscow is 1967 km (1222 miles), and 620 miles to St. Petersburg. Economy of the city of Murmansk is dominated by fishing industry (63% of the total industrial production of the city). In 2002, Murmansk has caught one sixth of all fish in Russia. The towns of Severomorsk, Apatity and Monchegorsk have between 50,000 and 100,000 inhabitants. There are fifteen towns with population between 10,000 and 50,000 (Gadzhievo, Kola, Polyarniy, Zaozersk, Snezhnogorsk, Ostrovnoy, Nickel, Roslyakovo, Murmashi, Zapolyarniy, Olenegorsk, Kirovsk, Kovdor, Polyarnie Zori, and Kandalaksha). The towns can be generally divided in two categories based on their specialization: closed towns with military functions (Zaozersk, Ostrovnoy, Polyarniy, Severomorsk, Snezhnogorsk), and one-company towns such as Kirovsk, Kandalaksha, Nickel, Pechenga, Monchegorsk, Olenegorsk and Kovdor.

There are two universities in Murmansk - a Pedagogical University and a Technical University, as well as a merchant marine school and an institute for the study of Arctic fisheries and oceanography. Arctic biological and Arctic geophysical institutes of the Kola Center of the Russian Academy of Sciences are located in Murmansk. An important scientific center for research of regional natural resources - the Kola Center of the Russian Academy of Sciences - is located in the city of Apatity (approximately 100 miles south of Murmansk). The Center comprises 12 scientific institutes, nine of which are based in Apatity, including geological institute (research of the interior of the earth of Kola Peninsula), institute of mines (research of various aspects of mining and concentrating technology), institute of chemistry and technology of rare elements and mineral resources of Kola Peninsula, institute of information science and mathematical simulation of technological processes, institute of ecological problems of northern industry, institute of economic processes, international center of science, culture and education and Kola regional seismological center of the Russian geophysical agency.

The only Russian region, which borders with Murmansk is Karelia Republic, while Arkhangelsk Region is on the other side of the White Sea. Murmansk Region is connected with the rest of Russia with one motor road and one railroad. Murmansk Region also borders Norway and Finland. It is connected to Finland by three motor roads, while only one motor road leads to Norway. The main industrial cities of the region are situated either on the main road heading from south to Murmansk, or in not a long distance from it to both sides. While many towns have small airports, the only airport able to receive large aircraft is in Murmansk and in Apatity. Flights to Kirkenes and Tromso in Norway and to Rovaniemi in Finland and Luleo in Sweden are available from Murmansk. The main commercial seaports are in Murmansk (Barents Sea) and Kandalaksha (White Sea). The throughput capacity of the Murmansk Commercial Port is 12 million tons per year. The total length of motor roads in the region is just 4,400 km (approximately 2,750 miles), railways - 891 km (430 miles).

Due to harsh climate, which causes high construction, maintenance and production costs, the main industries of the region are in the sphere of raw material extraction and basic processing. Excessive emphasis on output growth during Soviet times has led to negligence of negative ecological effect, which industrial enterprises have been making on vulnerable northern nature. Need to improve ecological aspects of technological processes further adds to production costs. According to Murmansk Regional Statistical Committee, the average number of employed in the region in 2002 was 351,000 (439,000 in 1995). Industry employed 26.6%, trade and public catering sector 17%, education, culture and science 12.1%, transport and communications 10.4%, healthcare 8.7%, and construction 5% of the labor force. The basic industries in Murmansk Region are mining, ferrous and non-ferrous metallurgy, fishing and power generation. As of the end of 2003, non-ferrous metallurgy accounted for 38.4% of the total industrial production of the region, power generation 13.2%, food-processing (including fishing) 19.3%, chemical industry 11.9%.

Murmansk commercial seaport is the second largest port in Northwest Russia in terms of cargo turnover (after St. Petersburg). The port has 13 berths able to accept ships with maximum 15.5 meters (50 feet) draft and 265 meters (848 feet) length. The Murmansk port is the only one in Northwest Russia that can serve ships with carrying capacity of up to 80,000 tons (PANAMAX type vessels). The port has a special terminal for reloading of apathite ore with annual throughput capacity of four million tons. In 2003, Agroshpera, which runs the terminal, has reloaded one million tons of fertilizers produced by Evrokhim holding in Kirovsk. The main cargo shipped through Murmansk commercial port is currently coal from Kuzbass. The port processed nine million tons of cargo in 2003, exceeding the 2002 level by 25%. In 2004, the port already reloaded six million tons in the first half of the year. However, increasing of the port's turnover is limited not only by the number of berths, but also by the fact that the railroad to the port has a dead end 20 kilometers from the port, and many spans to Murmansk are one way. This means that throughput of the port is limited by the current capacity of the railroad link between Murmansk and other parts of Russia. Murmansk shipping company is the leading enterprise serving the Northern Sea Route, which is the shortest sea link between Europe and South-East Asia. The round-year navigation is supported by the nuclear-powered icebreakers.

The fishing industry is among the most profitable in the region. Murmansk supplies 16% of Russia's fish production. Murmansk is key base for three fishing fleets, including Russia's largest Murmansk Trawl Fleet. In Soviet times fishing fleet and related industries employed half of the city's population. The Murmansk Trawl Fleet owns 86 fishing vessels that fish in the Barents Sea, in the Northwest Atlantic, and in the waters around the African continent. Fishing companies are probably the worst in paying taxes and reporting their actual sales, as a large portion of fish is sold directly from fishing vessels to Norwegian processing plants without ships calling on Murmansk ports. The tax regime and corruption in the port is the key to the problem. Unofficial estimates put annual turnover of the Murmansk fishing industry at $1-1.5 billion (although official statistics report fish and shellfish exports to be below $300 million). A growing segment is fish breeding. In bordering Norway, fish breeding is a huge industry with annual output of 400,000 tons of fish (mainly salmon). In Murmansk, fish breeding is not yet a big industry, producing some 400 tons of trout per year. There are reports that two of Norway's largest fish breeding companies Gigante Havbruk AS and Pan Fish are interested in launching salmon breeding projects in the bays of Kola Peninsula in cooperation with Murmansk fishing companies Pribrezhniy and Murman Sea Food respectively.



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