Astrakhan – Russia's gateway to the Caspian and Iran

Astrakhan is the administrative center of a region that is almost the size of Denmark. Home to more than a million people, the area is hoping for much-needed economic development after oil was recently discovered here.

Bounded on its Eastern shore by the Caspian Sea, Astrakhan is Russia’s gateway to the region. It bridges the Middle East to the Volga, Europe’s longest water course that carries half of all Russia’s river freight through to the Black Sea, the Baltic, and Moscow.

The Astrakhan region Deputy Minister of Industry and Transport, Vladimir Dergunov, says “we need to capitalize on our position as a transport hub – by road, rail, air, and sea. Ultimately, we want to overtake the Suez Canal as the major North-South transit corridor, linking Europe with Iran and India.”

Tehran is one of Moscow’s biggest trading partner with approximately 5 to 7 million tons of cargo, primarily metal, being exported to Iran each year across the Caspian.

Federal money is being pumped into the sea’s docking and port facilities, to facilitate increased volumes, and speed of transit.

Despite being hard hit by the global economic crisis, development of Astrakhan’s main international port, the Olya, is still a major project here. Last year, some 1 million tons of cargo passed through its terminals, 80% of that being steel; but the aim is to expand the port into a mini-city, capable of exporting and importing over 30 times that amount of cargo.

It’s a tall order for a region reeling from falling world steel prices that have directly impacted its ports’ annual profits.

There’s also a severe lack of skilled workers here, and once you leave the region’s center, badly maintained roads are a major issue.

But the region’s leaders are not worried. They say another economic lifeline is about to be thrown up.

“We know the Caspian basin contains vast oil reserves, and as Russia’s border region, Astrakhan’s ready to become the headquarters of exploration,” claims Astrakhan Governor Alexander Zhilkin,

After years of trawling Russia’s Northern Caspian, Lukoil finally announced two years ago that they would struck black gold.

Meaning local industry is primed for an oil-fuelled energy revival.

Construction of off-shore oil rigs has become a major area of industry in Astrakhan. Building work on rigs commissioned by oil giant Lukoil began in 2006, and directors say it will be ready to be shipped out onto the Caspian to begin exploratory drilling in July of this year.

The first 17,000 ton platform is bigger and more complex than any previously built locally. Project directors hope that if successful, it will bring Astrakhan international recognition as experts in offshore engineering.

“We’re the architects who’ve led this project from the initial designs, right through to when the rig is finally fixed into position at sea; and we are training up the next generation of Astrakhan engineers, as we believe in the long-term future of Caspian oil exploration,” says Ilya Kokarev, Director-General of the Caspian Energy Company.

Lofty aspirations for a region whose economic development only really began in ‘91 with the breakup of the Soviet Union.