ABSTRACT
In all sorts of ways Sakhalin oblast presents a microcosm of the problems facing the Russian Far East and Russia more generally. 1 It has a complex history, suffers from a narrow resource-dependent economy and is trying to come to terms with its increasing isolation and dislocation from the mainland of the Russian Far East and from the Russian economy generally. As we shall see, its traditional resource industries suffered during the 1990s, but it still has substantial resource potential. Nevertheless, after Moscow, Sakhalin has received more foreign direct investment than any other region in Russia. This is entirely due to the presence of oil and gas reserves off shore that have attracted the world’s largest oil companies to the island. Consequently Sakhalin presents an interesting case study, as it highlights the processes involved when a Russian region becomes incorporated into the global energy economy. This chapter is divided into three major sections: the first provides details of the inherited structure of the economy of Sakhalin oblast and its performance during the 1990s; the second examines the various offshore oil and gas projects and their progress to date; the third considers the various scales of interaction and the numerous actors now involved in realising Sakhalin’s potential as an oil and gas producer. The chapter concludes by considering the inter-relationship between Sakhalin’s political and economic relations with the federal government in Moscow and with the global political economy.
