Biggest growth in Russia

The Yuzhno-Khilchuyu field (BarentsObserver)

The Nenets Autonomous Okrug in major parts of 2009 had the biggest growth in industrial output in Russia, the latest Barents Monitoring reports shows.


According to the report, which is written by the Norwegian Barents Secretariat’s office in Naryan-Mar, the Nenets Autonomous Okrug, the regional growth in industrial production in the first nine months of 2009 amounted to 34,3 percent. That is the highest in Russia, the report states.

Along with the Sakhalin Oblast in the Far East of the country, the Nenets AO was the only Russian region with industrial production growth every month all through 2009.

However, as the report confirms, the growth comes exclusively from the higher oil production in the region. Thanks to last year’s launch of the Yuzhno-Khilchuyu project, a field owned by the Lukoil-controlled Naryanmarneftegaz company, oil production has boomed in the region. According to the monitoring report, oil production, including natural gas condensate, in the first nine months of the year increased by more than 30 percent year-on-year, and totaled 13,927 million tons.

The higher oil production has given growth also in other sectors, among them electricity generation, which in the period increased 25,1 percent year-on-year. Also retail trade saw a positive development in the region with a 9,5 percent increase in turnover year-on-year. Strong growth was registered also in the cargo transport sector.

At the same time, the Nenets Okrug is one of the Russian regions with the biggest drop in the construction industry. In January-September the drop was 52,8 percent compared to the same period in 2008, which makes the region one of the fifth worst off in Russia in the sector.

Salaries in the far northern region remain among the highest in Russia. The average regional salary in August amounted to 44.565 RUB, which is up by 2,2 percent compared to August 2008. Unemployment saw an increase with 758 people officially registered as job seekers – up 50 percent from the same period in 2008.

The economy of the Nenets Autonomous Okrug, like the Russian economy as a whole, remains heavily and dangerously dependent on hydrocarbon production. The region is one of few regions of the Russian Federation where the volume of industrial production has been increasing steadily in the whole post-Soviet period. The fuel industry has a 98 percent share of the total industrial production.


Read more Barents Monitoring reports here