Polar Technology Opportunity Survey May 2019
Kongsberg Satellite Services, Svalbard
Courtesy: Heidi Andreassen, IN Arktis
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Executive Summary
The polar regions of Earth are changing for several reasons, much of it related to climate change. As the poles become more accessible, economic opportunities within shipping, research and development, mining, tourism, and renewable energy become apparent. These opportunities highlight concerns about security, sovereignty, safety and much increased pollution.
Depending on where one defines the Arctic polar region to be, there are between 4 and 15 million inhabitants. Once much more isolated from each other and the world, Arctic residents are more empowered over their future than ever before and are working together through forums such as the Arctic council on sustainable solutions for development.
Few inhabitants in dispersed communities means limited infrastructure including roads, broadband, airports, as well as services for inhabitants such as hospitals and schools. Energy in many of these areas is generated by diesel power plants; while reliable in harsh conditions, pollutes the air with both dangerous emissions and noise. The size of the different market segments in the Arctic is relatively limited, however finding sustainable and cost-effective solutions is a priority for the Arctic Governments.
Opportunities in the Antarctic differ; this is not an area of the world that has a natural population, however it has many international temporary citizens engaged in research which will benefit countries around the world.
In general, opportunities are in infrastructure development, and cues should be taken when governments announce funding and programming for these regions. Some of the opportunities are purely export from Norway, and many will be about cooperation and partnership in technology development.
Norwegian technology, ruggedized for harsh conditions, have an advantage for these opportunities. Norway is a “testination” that qualifies these technologies; if it works in Northern Norway, it will work is other harsh environments as well.
This report intends to profile markets around the world that could have opportunities for Norwegian companies who have technology suitable for remote location and cold climate development through the use of standardized questions. This report is not intended to speculate on or address the defence sector, which has its own specific set of rules for procurement, and for this Innovation Norway has experts for facilitating this type of business. The information is not meant to be exhaustive and rather is intended to inspire mobilization towards these markets where Innovation Norway has a presence, network, and competence for building Norwegian business abroad.
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Contents Executive Summary ...... 2 Canada ...... 5 Opportunities in cold climate technology vs. remote location technology ...... 5 Main Opportunity Areas ...... 5 Recent (~2 years) investments made, speculated investment...... 5 Buyers ...... 6 Success Factors ...... 6 Link to official governmental strategy for polar development...... 6 China ...... 7 Opportunities in cold climate technology vs. remote location technology ...... 7 Main Opportunity Areas ...... 7 Recent (~2 years) investments made, speculated investment...... 7 Buyers ...... 8 Success Factors ...... 9 Link to official governmental strategy for polar development...... 9 Germany ...... 10 Opportunities in cold climate technology vs. remote location technology ...... 10 Main Opportunity Areas ...... 10 Recent (~2 years) investments made, speculated investment...... 10 Buyers ...... 10 Success Factors ...... 10 Link to official governmental strategy for polar development...... 11 India ...... 12 Opportunities in cold climate technology vs. remote location technology ...... 12 Main Opportunity Areas ...... 13 Recent (~2 years) investments made, speculated investment...... 13 Buyers ...... 13 Success Factors ...... 13 Link to official governmental strategy for polar development...... 14 Japan ...... 15 Opportunities in cold climate technology vs. remote location technology ...... 15
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Main Opportunity Areas ...... 16 Recent (~2 years) investments made, speculated investment...... 16 Buyers ...... 16 Success Factors ...... 16 Link to official governmental strategy for polar development...... 16 Russia ...... 17 Opportunities in cold climate technology vs. remote location technology ...... 17 Main Opportunity Areas ...... 17 Recent (~2 years) investments made, speculated investment...... 17 Buyers ...... 18 Success Factors ...... 18 Link to official governmental strategy for polar development...... 18 South Africa ...... 20 Opportunities in cold climate technology vs. remote location technology ...... 20 Main Opportunity Areas ...... 20 Recent (~2 years) investments made, speculated investment...... 21 Buyers ...... 21 Success Factors ...... 21 Link to official governmental strategy for polar development...... 21 USA ...... 22 Opportunities in cold climate technology vs. remote location technology ...... 22 Main Opportunity Areas ...... 22 Recent (~2 years) investments made, speculated investment...... 22 Buyers ...... 22 Success Factors ...... 23 Link to official governmental strategy for polar development...... 23
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Canada
Opportunities in cold climate technology vs. remote location technology
Opportunities include both cold climate technology and remote location technology. In the area of cold climate opportunities include infrastructure ruggedized for challenging conditions including building materials such as concrete, HVAC systems, fast building (building season is quite short) and technology to enhance diesel generation. Remote location technology is interesting for monitoring environmental conditions such as herds, ice melt and freeze up, and broadband/communications technology. The Arctic regions of Canada have extreme climate conditions, are a long distance from industrial centres and have lack of basic infrastructure; considering the small population base investment has been slow but it is increasing.
In the Canadian territory of Nunavut, 11 out of 25 power plants are beyond their expected lifespan.
Main Opportunity Areas
Innovative and ruggedized infrastructure technology including concrete and other building materials for cold environments, technologies and services that can act against the effects of climate change such as coastal erosion, waste management and small energy systems.
The Government of the Northwest Territories (GNWT) are considering deep retrofit of the housing fleet include increasing wall insulation, installing high-efficiency doors and high-efficiency triple- or quadruple-pane windows with low-emissivity coatings. Additional deep retrofit activities may be appropriate for commercial buildings and larger multi-unit residences. GNWT estimates that retrofitting all buildings in the territory before 2050 will provide a 9% ROI, $120M in savings by 2030, and $20M in savings per year after 2030.
There is currently a moratorium on drilling in Canada’s Arctic until 2021. Until then, the federal government is said to be spending time consulting with inhabitants, research and industry to come up with facts to inform the review of the moratorium.
Prime Minister Justin Trudeau announced in May 2019 that Ottawa would spend $15.7 billion on new ships for the coastal service including two more Arctic patrol vessels from Halifax-based Irving Shipbuilding.
Recent (~2 years) investments made, speculated investment.
ArcticNet, a network of centres of excellence in Canada, recently received a five-year funding extension worth nearly $32.5 million.
Past ArcticNet projects have ranged from engineering solutions to stabilize the runway of Iqaluit airport to health programs in Nunavik, from assessing the risk of drilling for oil in the Beaufort Sea to helping define the border between Canada and Greenland in Nares Strait.
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http://www.arcticnet.ulaval.ca/Docs/Press%20Release_ArcticNet_Renewal_2019.pdf
The Government of Canada will invest more than $180 billion over 12 years in public transit projects, green infrastructure, social infrastructure, trade and transportation routes, and Canada’s rural and northern communities. Included in this are:
• $30 million for the Inuvik Wind Generation project through the Investing in Canada plan. Arctic Energy Fund, and the Government of the Northwest Territories is contributing up to $10 million. • $2 billion will support infrastructure projects that meet the unique needs of rural and northern communities like facilities to support food security, local access roads and enhanced broadband connectivity. • $400 million will be delivered through the Arctic Energy Fund to advance general energy security in the territories. • $4 billion will support infrastructure projects in Indigenous communities.
Canada is the world's largest mining nation. 980 mines are established in the country, many of them in the Arctic; the world’s largest mining exploration and major mining investments are made in Canada, and it is expected that about $ 140 billion will be invested in the mining sector over the next 5 years.
Buyers
Buyers are mainly public governmental bodies.
Success Factors
Frequent trips to market, locating a business in the area, hiring local employees and involvement in community life are very important to signal commitment to a mutually beneficial relationship. English is the working language in the high north of Canada, and knowing a few phrases in the local language (there are several Inuktitut dialects across the Arctic), would be very respectful.
Link to official governmental strategy for polar development.
https://international.gc.ca/world-monde/international_relations-relations_internationales/arctic- arctique/index.aspx?lang=eng
Contact in Canada: Alana Prashad, Senior Advisor IN Toronto [email protected]
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China
Opportunities in cold climate technology vs. remote location technology
In Chinese market, there are business opportunities related to both cold climate solutions and remote location technologies. The commercial interests are mainly in following three fields: oil and gas exploration and sea mining; Fishery, and shipping.
Main Opportunity Areas
China has been engaged in research programs and looking for business opportunities in oil and gas exploration, sea mining, fishery and arctic shipping route.
• Technologies and solutions in relation to research vessel, research equipment and methodologies, research program collaborations are the important areas of interest.
• Industrial standards development, relevant technologies and equipment for natural resource exploration and operation in arctic zone are not yet fully developed. All commercial based or government projects in this fields are interested.
• Fishery and Shipping operations, equipment and logistic management are with special interests.
In addition to these areas of interest, Chinese companies also showed interest in Investment in polar region on the infrastructure, port development for ship services, transit facilities such as LNG shipping, skiing and tourism development projects. The Arctic satellite communication, remote sensing technologies and services are both interested form research and commercial point of view. Recent (~2 years) investments made, speculated investment.
No actual figures of investments were found but we gave major investment areas and projects for reference.
Recent investments by the Chinese government and state-owned companies are following the guidelines of the China’s Arctic Policy.
In the research sector, China has completed the “Xue Long 2” (meaning Snow dragon) ice-breaking research vessel. The building of the vessel started in December 2016 and finished in September 2018. The vessel is designed for polar research purpose.
China has opened one Arctic scientific research base, Yellow River Station on Svalbard, Norway in 2004. In Antarctica region, China has four research stations, and is going to build the fifth one.
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In the Arctic oil and gas sector, China National Petroleum Corporation has formed JV with Russian companies in the YAMAL LNG project. BGP International, China Oilfield Services Limited, China National Offshore Oil Corporation and some other Chinese companies also conducted seismic survey in the region.
China Ocean Shipping Corporation has tried the first voyage along the Northern Sea Route (NSR) in 2013. NSR may shorten the normal sea route by 14 days or more which implies huge commercial interest. Shipyards in China has conducted various polar multi-purpose vessel research and other projects targeting on the commercial use of vessels for the future NSR.
Chinese companies have been looking for direct investment opportunities in Arctic region, including Canada, Greenland, Iceland, Finland, Norway as well as in Russia. A high level delegation of Shanghai Zhenhua Heavy Industries visited Kirkenes in the summer of 2018 for possible investment cooperation on harbor facilities.
Buyers
Buyers are both coming from public and private sectors. Government agencies and the programs they initiated and ran are primarily funded by state budget or local government budgets, with specific targets and deadlines. State-owned companies at various administrative levels have access to these programs or they can use company budget for commercial projects.
Private companies generally follow the state-owned companies to provide services on contract basis.
Possible buyers of various services from Norwegian suppliers are:
Category 1: Scientific research Chinese Arctic and Antarctic Administration, http://chinare.mnr.gov.cn/english/ Polar Research Institute of China, http://www.pric.org.cn/detail/category.aspx?c=1 (in Chinese) Institute of Oceanology, Chinese Academy of Sciences, http://english.qdio.cas.cn/ Ocean University of China, http://eweb.ouc.edu.cn/
Category 2: Oil and Gas exploration China National Offshore Oil Corporation, http://www.cnooc.com.cn/en/ China Oilfield Services Limited, http://www.cosl.com.cn/col/col20611/index.html BGP International, CNPC, https://www.bgpintl.com/f/index.html (in Chinese) China National Petroleum Corporation, http://www.cnpc.com.cn/en/ (shareholder of Yamal project)
Category 3: Arctic Maritime, Shipping and shipbuilding China Shipbuilding Industry Corp. , http://www.csic.com.cn/en/ China State Shipbuilding Corp., http://www.cssc.net.cn/en/ China Ocean Shipping Corp., http://lines.coscoshipping.com/home/ ZPMC, https://www.zpmc.com/
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Success Factors
Knowledge of Chinese business etiquette is important for Norwegian companies doing business in China. Local presence, information on government policy, state-owned company goals and corporate governance will be crucial to maintenance dialogue and relationship with potential customers.
In general, Norwegian companies shall not enter for “quick money” in the Chinese market. Market entry seemed difficult in the beginning but it requires patience to build networks, to understand the needs and to be willing to adapt to local requirements for products and services.
Business negotiations may seem quite tough for Norwegian suppliers, especially for SMEs simply because of the size of the Chinese state-owned companies and the information asymmetry of internal guidelines.
China’s Arctic interests are advanced and sophisticated. When entering the market, it is important to understand framework and policies such as the National Security Law of the People's Republic of China, the National People's Congress on the 13th five-year planning outline for national economic and social development, the General Office's views, the Circular of the State Council, and the State Council. Innovation Norway Beijing is well positioned to help Norwegian companies understand these frameworks and how they apply to business.
Link to official governmental strategy for polar development.
English version: http://www.scio.gov.cn/ztk/dtzt/37868/37869/37871/Document/1618250/1618250.htm Bilingual version: http://language.chinadaily.com.cn/2018-01/26/content_35589695.htm
Contact in China: Lin Song, Senior Advisor
IN Beijing [email protected]
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Germany
Opportunities in cold climate technology vs. remote location technology
Cold climate solutions are the most relevant within the German market. Germany’s main focus point within cold climates are to reduce environmental impact, but market possibilities can also be found within other market areas. Remote location technology is mostly interesting in regards of technology innovation, and to some extent within research and development.
Main Opportunity Areas
The largest opportunity for polar technologies and solutions in the German market is within science and research, where Alfred-Wegener-Institut (AWI) is very central. The maritime and offshore industry, especially within maritime technology and ship building, is also among the largest opportunities. Recent (~2 years) investments made, speculated investment.
In the maritime agenda 2025 there is a planned replacement of the research ships Polarstern, Meteor and Poseidon into a combined research vessel: https://www.bmwi.de/Redaktion/EN/Publikationen/maritime-agenda- 2025.pdf?__blob=publicationFile&v=5
Buyers
Within science and research most parties are public, while the maritime and offshore industry has a high weight of private parties, but public parties are also present. Within science and research AWI, The Helmholtz Association and German Society of Polar research is very central. In regards of the maritime and offshore industry are Blohm & Voss, and ThyssenKrupp Marine Systems (TKMS) some of the central parties.
Success Factors
Important to remember when wanting to do business in Germany is that the use of German is very much preferred to English, and knowledge of German is in many situations expected. This is a factor that many Norwegian businesses tend to underestimate.
In regards of locating a market, there can be found clear market differences between the different regions. In addition to this are many markets well developed with tough competition, meaning that the need for differentiation is relatively high in many areas, the maritime and offshore industry included. This is especially due to Germany’s high competence within engineering and technology.
In addition to this, cultural differences are also something that tends to be underestimated and are a crucial factor to remember, both in B2B and B2C markets.
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Link to official governmental strategy for polar development.
Germany Arctic Policy: https://www.bmel.de/SharedDocs/Downloads/EN/International/Leitlinien- Arktispolitik.pdf?__blob=publicationFile
Contact In Germany: Tim Genge, Advisor, IN Hamburg [email protected]
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India
Opportunities in cold climate technology vs. remote location technology
India co-hosts Himalaya, which is as the highest mountain range in the world and often referred to as the third pole. India’s interest for Arctic and Antarctic is also growing, primarily driven by research, but also motivated by economic and strategic interests as the awareness of the geopolitical, strategic and security importance of the Arctic is growing. India has a research stations in Ny-Ålesund in the Arctic and two research stations in Antarctica.
The Indian motivation for polar research and presence is closely linked to the need for understanding the connections between the climatic changes on the poles, the level of the ocean, the Indian monsoon and the glaciers in Himalaya.
India can offer opportunities in both cold climate solutions and remote location technologies. Cold climate solutions are related to: A. India’s polar activities in Arctic, Antarctic and Himalaya. • India published in 2017 a tender for design and building of an ice-class research vessel which eventually also needs to be equipped with technology for operations in polar regions. • Building of a new research Maitri station in Antarctica is under discussions and building of a third research station in Antarctica is on the agenda. • Technologies for resource exploration and conducting of scientific activities in the polar region. • Technologies to study climate change and its impact on India and especially the Indian monsoon.
B. Infrastructure solutions and natural disaster management for the Himalayas: - includes also remote location technology The climatic conditions in the Himalayas require a development considering the high altitude and low temperatures, in addition to increasing natural disasters due to changes in weather systems and the monsoon. Indian stakeholders for infrastructure development and nature disaster management have expressed interest for Norwegian competence and technology and some joint activities are already taking place between Norwegian Geotechnical Institute (NGI) and National Institute of Rock Mechanics (NIRM). There is further an interest from the Indian Railways in the Norwegian tunneling technology. Norwegian Tunneling Network has in return expressed interest in the opportunities in India. Three Indo-Norwegian projects on geo-hazards have received funding from both Indian and Norwegian government as a result of a joint research call. Further scope for Norwegian collaboration can be found within • Tunneling and underground works in the Himalayan region. • Road building on permafrost. • Snow removal technologies and equipment (A Norwegian company Øveraasen https://www.overaasen.no/en/ has recently sold five machines for snow clearing to the Border Roads Organization. These will be used at the Srinagar and Leh airports. • Low cost modular housing. • Disaster forecasting and management of natural disasters like landslides and avalanches • Drainage, liquid and waste management in Himalayan regions
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C. Military operations in the Himalayas: - includes also remote location technology India’s standing army is the world’s second and India ranks fourth in the world when it comes to military spending. A large share of its activities takes place in the north along its mountainous borders towards Pakistan and China. For these activities, equipment is needed; personal gear, clothing and tents, but also technical equipment as drones and sensors tolerating cold climate. Norwegian companies with this expertise are positioning themselves for future opportunities in are in dialogue with Innovation Norway, India. Key solutions are related to: ▪ Surveillance and monitoring ▪ Clothing and shelter ▪ Drones for military purpose ▪ Arms and ammunition
Additional Remote location technology is needed in India related to: D. Shipping: At this stage, India’s shipping interest are primarily focussed on research vessels. India plans to build polar class vessels in Indian shipyards in collaboration with foreign shipyards. At this stage, we don’t see any interest from commercial shipping. E. Electrification and power: In 2018, electricity has in principle reached all India, but there are still challenges related to storage, connectivity, stable supply and grid management, particularly in rural and mountains India. Since India is decarbonising its off-grid energy establishments, all off grid Himalayan regions earlier powered by diesel generators are moving towards renewables. This would also apply to military installations in the Himalayas.
Main Opportunity Areas
The largest opportunities for polar technologies and solutions are estimated to be in • Design, construction and equipment (including AUVs) on board of the planned ice-class research vessel • Infrastructure for the mountain's areas in north India: Tunneling and underground works, snow removal equipment, ice runways. • Exploration of maritime resources (energy including energy storage, minerals, food) including deep sea mining
Recent (~2 years) investments made, speculated investment.
Recent investments are very difficult to estimate. However, it is known that about USD 250-300 million have been sanctioned for the Polar research vessel by the Indian Government.
Buyers Buyers would be mostly public; research institutions and Ministry of Earth Sciences for polar activities; Border Roads Organization; Ministry of Defence; Ministry of Roads Transport & Highways
Success Factors
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Norwegian companies targeting India would need to visit frequently and be patient. A joint venture or another form of tie-up with and an Indian company is sometimes recommended or even necessary. Separate requirements apply for government tenders. For interactions with Indian government, it is advices to use Innovation Norway as the commercial section of the embassy as intermediary.
English is the main language for business with foreign stakeholders.
Link to official governmental strategy for polar development.
No strategy document exists as such, but different areas of the polar activities under MoES can be found here (even though partly outdated): Research priorities for the Arctic are included in the five-year (2012-2017) plan for the Indian Ministry of Earth Sciences (MoES). https://www.moes.gov.in/content/polar-science-cryosphere
Contacts in India: Inger Midtkandal, Special Advisor [email protected] Asheesh Agarwal, Senior Advisor [email protected] Pankaj Patil, Advisor [email protected]
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Japan
Opportunities in cold climate technology vs. remote location technology
Japan has long history of presence in the Arctic, primarily through their involvement in polar research, originating in Antarctica (from 1910). National Institute of Polar Research (NIPR) opened their research station in Ny Ålesund in 1990 and is re-opening a newly build station in 2019. Japan sees the importance of engaging in the Arctic areas with particular interests in the following: • Contribute to polar research, particularly related to climate/environment • Participate in the development of the Arctic region economically; shipping lanes (Northern Sea Route-NSR), natural resources such as energy (NG from Yamal in particular) and minerals, technologies for cold climate • Participate in the multilateral dialogue, ensuring the rule of law Japan was awarded observer status in the Arctic Council (AC) in 2013, enabling a closer dialogue politically with the Arctic states and other AC observing countries.
Business opportunities: Being a non-Arctic country geographically, the Japanese market opportunities are basically related to activities that Japanese companies/stakeholders are engaged in in the Arctic region. The following might be seen as business opportunities for Norway: • Development of Arctic shipping: The Russian LNG development at Yamal is of high interest to Japan, as an end-user of LNG, but also as a forwarder of LNG to other Asian and European markets. Japanese shipping companies, such as Mitsui OSK Lines (MOL) would like to take active roles in the development of the logistics. They have reported the initiation of “ship-to-ship transfer” from ice-breaking capacity LNG tankers to long-distance tankers at Honningsvåg, https://www.arctictoday.com/9-million-tons-russian-lng-will-reloaded-norwegian-waters-2019/. LNG from Yamal might be competing with LNG from Snøvit. However, the LNG logistics might also provide business opportunities for Norway. Similarly, development of port facilities along the NSR with Japanese partners could be beneficial. Technologies for better sea ice prediction and weather forecasts are of interest to the shipping companies, furthermore technologies inhibiting ice formation on the ship (equipment for cold regions). • Earth observation/monitoring: Japan is a long-term user of KSAT’s Svalsat station, particularly through JAXA. Technologies for the use of satellite data, ice/ocean-based sensors (remote sensing technologies) could find end-users in large-scale public organisations as well as in the maritime sector. • Natural resource exploration and exploitation: Japanese oil and gas industry has a strong interest in taking a role in further development of oil and gas fields in the Arctic region. The supply industry might have a long-term potential if this materializes. Furthermore, possible seabed mining activities in northern Norwegian territorial waters could also incorporate partnership with Japanese industry, due to similar activities currently taking place in their own water. Development of AUVs for operating below sea ice could be of interest. When Japan is ready to receive large amount of green or blue hydrogen (road map towards 2030) for their energy market in transition (towards 2030), hydrogen produced from wind power in Finnmark (green hydrogen) or from natural gas with CCS (blue hydrogen) could be a reality with large- scale ships using the NSR.
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Main Opportunity Areas
• Shipping/maritime logistics • Earth observation/monitoring systems • Energy/minerals Recent (~2 years) investments made, speculated investment.
Possibly related to ship logistics, example “ship-to-ship transfer” of LNG in Honningsvåg, https://www.arctictoday.com/9-million-tons-russian-lng-will-reloaded-norwegian-waters-2019/ https://www.reuters.com/article/lng-yamal-norway/yamal-lng-vessels-to-make-up-to-160-transfers-in- norwegian-waters-by-mid-2019-idUSL8N1Y24ID Buyers
Larger shipping companies (private), research institutions (public), weather forecast companies (private), oil & gas companies (private)
Success Factors
Development of a personal network/relation among the key Japanese stakeholders is important in order to get in a position to establish a long-term and solid customer or partner relation. This might take time and resources. Innovation Norway, through the presence at the Embassy in Tokyo has developed over many years’ connections to authorities, research institutions, NGOs and companies seeing the Arctic region with particular interest. English is not always well spoken, however within the business sectors here discussed, this might be somehow better than average. Link to official governmental strategy for polar development.
Japan’s Arctic Policy (2015), https://www8.cao.go.jp/ocean/english/arctic/pdf/japans_ap_e.pdf
3rd Basic Plan on Ocean Policy (2018), https://www8.cao.go.jp/ocean/english/plan/pdf/plan03_gaiyou_e.pdf
Other JPN-NOR relevant link: Japan-Norway Arctic Science and Innovation Week 2016, http://injapan.no/arctic2016/
Contact in Japan: Svein Grandum, Special Advisor [email protected]
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Russia
Opportunities in cold climate technology vs. remote location technology
The growth areas identified as priority for the Russian Arctic are as follows: - Integrated social and economic development of the Russian Arctic - Scientific and technological development - Sophisticated information and telecommunications infrastructure - Environmental safety - International cooperation in the Arctic
Realization of the national interests and the strategy of the Russian Federation in Arctic requires solutions of the basic tasks. Key factors influencing the socio-economic development of the Russian Arctic are extreme climate conditions, long distance from industrial centres, lack of basic infrastructure, etc.
Cold climate solutions and remote location technologies are relevant mechanisms for the implementation of the development strategy.
Main Opportunity Areas
Russia’s economic interests in the Arctic are based on three fields – natural resources, maritime transport and ecosystem’s protection.
Development of mineral resources and offshore fields in the Arctic (*Ban on equipment, technologies and services for use in Russian Arctic projects (exploration and production on the Russian shelf at a dept of over 150 meters). Check the sanctions list.) • Supporting the offshore hydrocarbon development projects to be deployed on the Russian continental shelf and the development of offshore service complex and its components, such as offshore geoexploration, fibreoptic and satellite communication and monitoring systems. • Transportation system: Modernize and develop infrastructure Arctic transport system to retain the Northern Sea Route as a single national transmission backbone of the Russian Federation. • Advanced route planning in ship navigation is not possible due to lack of reliable ice forecast, hydrometeorological and information services system; inability to replenish the stocks of fuel, water and food. • Climate and environmental safety in the Arctic zone: To protect diversity of Arctic flora and fauna in conditions of the expanding industrial exploration and global climate change; to monitor condition of the ecosystems and the vegetation.
Recent (~2 years) investments made, speculated investment.
The investment attractiveness in the Russian Arctic is low due to limited number of projects and facilities to invest in and support. In fact, it is only development of mineral resources and offshore fields.
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“The Arctic region accounts for more that 10% of all investments in the Russian economy and this figure will grow”, - said Vladimir Putin during the International Arctic Forum in Saint-Petersburg on April 9, 2019.
State investments and budget
2017 year: http://www.gks.ru/free_doc/new_site/region_stat/calendar1-2017.htm Long-term investments – 1 892 362 mln RUB Short-terms investments – 2 408 278 mln RUB
2018 year: http://www.gks.ru/free_doc/new_site/region_stat/calendar1-2019.htm Long-term investments – 7 182 857 mln RUB Short-term investments – 4 864 545 mln RUB
Buyers
National interests in the Arctic region are high, so mainly public or publicly controlled buyers (see also below).
The Federal Law on the Continental Shelf of the Russian Federation contains specific rules on the development of natural resources on the continental shelf and sets regime for the development of natural resources. Only two state companies – Rosneft and Gazprom – are authorised to work on the Arctic coastal shelf now. In general, subsoil users can only be companies with share/state ownership of more that 50%, having at least 5-years’ experience of development of subsoil areas of the Russian Federation’s continental shelf.
The Development Strategy must develop and improve public-private partnership.
Success Factors
The Russian company structure is very hierarchical, and the people at the leading positions of companies make the final decisions. In Russian business culture respecting seniority is essential. Social contacts are very essential in doing business in Russia, the social space between people is not very big and showing emotions is considered as acceptable. Meeting can be very long and are often accompanied by “get to know you” lunches. Gifts are highly valued in the Russian business culture. English language levels vary enormously (more English speaking in the big centres).
Patience is important, negotiations can often be slow, depending on the business sector. It can take one year or more to start the business in Russia. Link to official governmental strategy for polar development.
“The development strategy of the Russian Arctic zone for the period up to the 2020” was signed on the 20th of February 2013 be the President of the Russian Federation Mr. Vladimir Putin http://government.ru/info/18360/
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Basics of the State Policy of the Russian Federation in the Arctic for the period till 200 and for a further perspective (English text) http://www.arctis- search.com/Russian%2BFederation%2BPolicy%2Bfor%2Bthe%2BArctic%2Bto%2B2020
State program of the Russian Federation “Socio-economic development of the Arctic zone of the Russian Federation for the period until 2020” http://static.government.ru/media/files/AtEYgOHutVc.pdf
This year the Government is going to draft and adopt a new strategy for the development of the Russian Arctic up to 2035. It should consolidate activities of our National projects and programs, investments plan of infrastructural companies and development of Arctic regions and cities
Contact in Russia: Dasja Sjaronova, Advisor [email protected]
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South Africa
Opportunities in cold climate technology vs. remote location technology
Both are relevant as far as South African activities in the Southern Ocean and Antarctica are concerned. The South African EEZ stretches far into the Southern Ocean and is due to be extended.
South Africa was a founding member of the Antarctic Treaty System (ATS) and as such, has a long-term track record and commitment to undertaking research in Antarctica and the Southern Ocean. The ATS is the overarching international legal framework by which nations conduct their presence and interests in the region, which is defined as the area south of 60° S. Signatories undertake to ensure that the Antarctic region will be used for peaceful and scientific purposes only and to protect and preserve the environment.
The three core principles enshrined in the ATS are that: (1) the region may be used only for peaceful activities, all military activities are prohibited; (2) scientific research is encouraged; and (3) territorial claims are suspended.
In response to its Treaty obligations, South Africa has established a permanent base in Antarctica, currently SANAE IV, on mainland Antarctica in Dronning 17 Maud Land within the Norwegian claimed territory. Farther north, in the sub-Antarctic environment the Prince Edward Islands (i.e. Marion Island and Prince Edward Island at approximately 46°S, 37°E in the south-west Indian Ocean) are South African territory. Marion Island hosts an over-wintering base intended for research and meteorological observations. South Africa also leases and manages a weather station on the British-governed Gough Island (40°19S, 9°55W) in the central South Atlantic Ocean.
South Africa’s research focus now extends to space research, and amongst others, South Africa’s recently established National Space Agency (SANSA) is rapidly developing the physical and human resources required for space research. South Africa’s longstanding presence in Antarctica (since 1960) is a critical component of this long-term international research thrust.
In future, Antarctica and the Southern Ocean will offer other vital opportunities relating to predicting and managing global change, food security, and the fueling of the bio-economy through bio-discovery and biotechnology. The Southern Ocean will also likely be a possible future source of fossil fuels and other strategic minerals.
Currently eleven “parallel” and “independent” programmes of various countries depart for Antarctica from Cape Town using vessels and aircraft for various destinations on the Antarctica continent. They transport personnel and equipment to and from scientific bases as well as for tourism purposes. They are Norway, Russia, Sweden, United Kingdom, Japan, India, Belgium, Netherlands, Germany and South Africa.
Main Opportunity Areas
• Survey technology and robotics to enhance research • Responsible subsea phosphate mining / also other minerals
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• With Cape Town as a regional base, supply/ fit maintain equipment on vessels departing from Cape Town for Antarctica Recent (~2 years) investments made, speculated investment.
Most recent (2012) major investment was the building of the Aghulas 2 icebreaker class vessel by STX Finland. A number of Norwegian suppliers were involved in the design and fitment. Survey equipment and automated solutions are under discussion, but not out on tender yet. Buyers
• Public sector buyers will include Department of Environmental Affairs • Private ship management company responsible for polar vessel • (Council for Scientific and Industrial Research) CSIR (Research institution similar to SINTEF) • Local companies supplying the Antarctic and islands bases and research community with technology and services
Success Factors
Finding a local partner is key. If selling to the public sector local content and some form of local establishment in order to offer after sales support is important. Not necessarily for an initial transaction but for future reference. Also important to have strong market intelligence and knowledge of procurement rules; and prioritize meeting with potential buyers at senior and operational level.
Link to official governmental strategy for polar development.
https://www.nrf.ac.za/sites/default/files/documents/Marine%20and%20Antarctic%20Research%20Stra tegy%20Final.pdf
South Africa and Norway have a long history of co-operation as far as Antarctica is concerned. The Nansen Tutu Centre is a good example, based on collaboration between the Nansen Centre/ University of Bergen and the University of Cape Town and a number of research bodies. The main focus areas are oceanography and marine research.
Contact in South Africa: Andre Kruger, Senior Advisor [email protected]
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USA
Opportunities in cold climate technology vs. remote location technology
There are opportunities in both areas in Alaska.
Main Opportunity Areas
• Wind/tidal/hydro/geothermal/biomass/solar energy. • (lithium/graphite battery challenges: they do not last very long in very cold climates) • Renewable energy storage • Rural micro grids • Cold climate housing
Oil and gas development has been contentious in the state of Alaska, as the current administration’s proposal to expand drilling faces great opposition. In March 2019 a federal judge restored bans in the Arctic ocean, subverting efforts to expand offshore drilling.
A prospect to watch is Pebble Mine. Gold and copper would be mined, however the fishery industry opposes this development as it could be hazardous to have industrial development at headwaters of some of the world’s largest fisheries.
The Port of Anchorage is past end-of-useful-life and corrosion of pilings is severely threatening operations; and this port serves 74% of the Alaskan population. Many of the other of the 125 ports require maintenance and upgrading. Alaska also lacks deep water ports. As ice recedes this can present an opportunity for economic development
Recent (~2 years) investments made, speculated investment.
This is currently a work in progress, but at the moment they are working with state sponsored grants for projects aimed at rural utilities (which are slowly becoming more scarce, almost to the point of gone). The US DOE, AEA and Denali Commission require training and planning, so they are positive that government funding will continue. https://www.denali.gov/wp-content/uploads/2018/10/Sustainable-Energy-Solutions-For-Rural-Alaska- April-2016.pdf
Washington State and Norway have signed a memorandum of agreement that will include modernization of fishing and seafood by engaging sustainable fishing companies, equipment suppliers, processing technology developers and sustainable aquaculture. This will upgrade the coastal fleet and be an opportunity for the entire northwest Pacific American coast including Alaska.
Buyers
At this time, the most strategic move is to go through the local government.
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Success Factors
Alaska is very much a long term relationship state. You have to be there to win business deals, and you have to know people/gain their trust. Link to official governmental strategy for polar development.
https://www.energy.gov/sites/prod/files/2016/04/f30/sustainable-energy-solutions-AK.PDF
Contact in USA: Ken Huste, Advisor [email protected]
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