Development of subsoil use in Russia in the context of economic sanctions

The U.S. and European sanctions policy against Russia continues to intensify. While until February 2022, the sanctions were mainly aimed at private companies and individuals, over the past four months, a flurry of sanctions restrictions has hit all major sectors of the Russian economy.

At the moment, the bans have affected the energy industry, including the oil and gas production and processing industry and the construction of power plants. With the introduction of new sanctions packages, European companies are banned not only from supplying energy production equipment to Russia, but also from investing in the development of the Russian energy, industrial and mining sector. If, according to the Central Bank of Russia, as of the third quarter of 2021, direct investment from Europe amounted to $27.6 billion, now Russian companies are forced to seek this money inside the country, as well as in the countries that abstained from sanctions.

The next sanctions package envisages an embargo on ferrous metal products from Russia to the EU countries. According to calculations by the European Commission, Russia will lose about €3.3 billion annually as a result of these restrictions. This forces the management of the steel industry to change its logistics and look for new markets both in Russia and abroad.

The bans have also affected deals with Russian companies working in the extraction, refining and transport of oil, oil products and natural gas, as well as all the Oboronprom companies. However, our government's position is expressed in the words of Russian Energy Minister Nikolai Shulginov: ... now we have to revise plans for the development of the oil, gas, coal, and electric power industries in general. But this does not mean that our country is going to reduce the volume of hydrocarbon production and give up its leading position on the world energy market...".
Sanction pressure has also affected the expert community, especially in terms of financial and economic evaluation of enterprises capable of having a positive impact on the socio-economic development of the country. All leading consulting and auditing companies stop providing such services in July 2022.
In this regard, the need for sovereign independent expertise in accordance with international standards of evaluation, initiated and developed by the National Association for the Examination of Subsoil (NAEN) under the leadership of Tretyakov Andrey Viktorovich, increases significantly. The purpose of such expertise is to create the most favorable conditions for:

  • attracting direct and indirect investment resources;
  • rational use of mineral resources;
  • determination of production plans for the development of mining enterprises;
  • determining the investment potential and application of production (processing) technologies;
  • technological solutions for subsoil extracting companies;
  • assessing reserves and compiling a cadastre of mineral deposits to create territorial points of economic growth on a regional basis.

About the importance of such expertise in the conditions of economic sanctions, as well as about the role of the independent expert community, the development of its level of competence, the director of the "NAEN" Andrey Tretyakov said at the Mining and Geological Forum "Mingeo Siberia", which was held in June 2022 in Krasnoyarsk. Compliance of the sovereign independent mining and economic audit with international standards, allows it to be carried out at the highest expert level.

Based on the results of the independent expertise carried out in accordance with the generally accepted international standards, a public report is prepared which gives an objective picture of all the positions in the sphere of subsoil use. This will allow us to adjust the volume of extracted resources in accordance with changes in the market as quickly as possible, reconstruct logistics chains, attract Russian and foreign investors from countries that have not joined the sanctions in order to emerge from this difficult situation with the least financial losses.

Brief Synopsis.

"NAEN" is an association of manufacturing enterprises, design and expert organizations to promote the formation of a highly effective, innovation-oriented, internationally integrated system of geological exploration and development of mineral resources of the Russian Federation by consolidating the efforts of professional participants in the field of subsoil expertise.

The activities of the "NAEN" are managed by a collegial body - the Supervisory Board. The responsibilities of the Supervisory Board are stipulated in the Statute approved by the decision of the constituent assembly of November 16, 2004, with further amendments and additions, and in the Regulations on the Supervisory Board of the "NAEN". The supreme body of the "NAEN" is the General Meeting of the members of the "NAEN".

The functions of the sole executive body are entrusted to the Director of the "NAEN" Tretyakov Andrei Viktorovich, who heads the Association since 2021.