Special Report by Anton Borisov
The Coasts of Astrakhan
Have you seen a beluga being milked? What do oilers do on a platform? How do they weave nets? How do they make sturdy ships? How do they cook boots? How do they put giant locomotive on wheels? And how do they save lives?
All of the answers are in a place, you've known it since you were in school, where the longest river in Europe discharges into the largest closed water reservoir in the world. Yes, we're in Astrakhan Oblast, where the Volga leads into the Caspian Sea. We're going to show you how the region develops its economy. Many aspects of this development are associated with water.
The economy of Astrakhan Oblast is the wealth of the Caspian Sea, oil and gas, 70% of Russian sulphur, 80% of Russian salt, and fish, both fresh- and salt-water. The Volga is a well-known transport route. In general, Sergey Morozov says that the region is quite well-placed.
Sergey Morozov, acting governor: "We have a nice geographic location. We'll be very competitive if we develop inland water navigation. They say that Astrakhan is a port of five seas. Right, here's the Volga. We're also developing our railroad traffic. Here, we can acquire products that transit from Turkey".
Right, the local economy is not about water alone. The earth enjoys the favorable climate and gives good crops. In terms of industrial growth, 116.2%, the region ranks third in Russia. However, on the scale of the social-economic development of the regions, Astrakhan Oblast ranks 59th. Clearly, nobody's happy with the current situation. The new region development strategy by 2035 is supposed to fix the issue. It implements the effective use of economic resources.
Among the key riches of the region are the black gold and the blue fuel of the Caspian Sea. An oil platform is waiting for us in the sea. We're lucky to be allowed there. So off we go!
Here's the Caspian Sea. Its total oil and gas condensate reserves are estimated to be twenty billion tons. Several countries are exploiting them, including Russia. A curious fact: At first, geologists said that there was nothing to catch in the north of the Caspian Sea and there were no major deposits.
- We can see what Caspian oil looks like.
Alexey Shevchenko, deputy chief engineer: Right, we're currently sampling the oil. We produce high-quality oil.
- From what depth do you pump it?
- We pump it from a depth of 5,200-5,900 meters.
Lukoil, in particular, has opened six oil deposits. The two of them, Korchagin and Filanovsky, those are the names of famous oilers are already operational. The latter is the largest oil well opened in Russia in the past 25 years. It's oil reserves are 220 million tons and gas reserves are 40 billion cubic meters.
Nikolay Lyashko, CEO of Lukoil: "The reserves of the Northern Caspian Sea are over one billion. The reserves are great. In general, according to our recent estimates, we're planning to get more than nine hundred billion in investments".
Each oil well is serviced by several platforms. Specialists with degrees work two-week shifts here. The platform, where we were accepted into oilers, has a small facility that prepares oil and gas to be transported to the mainland. A so-called conductor block is being built nearby. It'll be a small uninhabited platform.
Here's one of the main parts of the oil extracting platform, the drill. Oilers claim that soon they'll install a boring cutter here and begin drilling new oil wells.
Nikolay Lyashko, CEO of Lukoil: Last year, we extracted 6.9 million tons from the Filanovsky and Korchagin deposits. In 2019, we plan to increase our total extraction to up to 7.3 million tons.
The extraction is increasing. In addition to new wells, Lukoil plans to open a third deposit, the Rakushechnoye, in four years. When a well is being drilled, all slug is sent away. The platforms send away all refuse, it's called zero discharge. The security here is pretty serious. Special vessels guard the platforms.
Vitaly Sulimov, captain of Filanovsky platform: It's a 4th arctic-class icebreaker because sometimes, the sea freezes in winter. It's equipped with foam fire extinguishers.
The region doesn't just have a lot of oil, it also has gas. The largest deposit in the European part of Russia, which has 2.5 trillion cubic meters of gas, is being developed by Gazprom. Together with Lukoil, they're among the biggest taxpayers in the region: tens of billions rubles along with investments, infrastructure, social facilities, as well as orders for Russian companies.
It's not like the platform was built somewhere abroad. It was made in Russia, moreover, here, in Astrakhan. The development of gas extraction is a good way to supply the local industry with orders.
The Lotos facility built a part of the oil platform. Now it's working on other ambitious orders.
This is a cruise ship. A project like this has never been built in Russia before. Let's check out the waterborne five-star hotel. Pyotr Veliky. It's no ordinary ship; it's designed to provide comfort to 300 passengers.
- It's not plastic, is it?
- It's not.
- Is it marble?
- Indeed.
- That's how luxurious it is. Okay, I'm going to take a shower now.
Fancy interiors. A richly decorated parade spiral staircase will be soon installed in here. The guests will use it to access the swimming pool. There will be a crystal chandelier hanging from the glass dome. A marvelous sight.
95% of it is made in Russia. The metal and equipment were produced in Russia.
- Made in Russia?
Sergey Korovin, deputy CEO: Right. The Rusprom company is our supplier. We have a diesel generator in here.
The ship will be launched in late May. Then, it'll be finished. After surviving the times of empty shops, the facility is building river ships again. It has a billion-ruble investment program. The orders are distributed by the United Shipbuilding Corporation. Apart from Pyotr Veliky, seven other projects are being built. The facility's recently launched barges. Right now, it's building a bulk carrier whose 170-meter hold can fit oversized cargo. The facility's almost finished two chemical tankers and two river motor ships. The latter will sail along rivers that only four feet deep. All ships have digital control panels but a retro design.
"It's put in motion by paddle wheels installed in the back".
In addition, the Lotos facility is anchored in a special economic zone. The zone has the same name, Lotos. Its members enjoy zero VAT taxes and import duties. It's cheaper to produce all this in a special economic zone. The residents of Lotos aren't exclusively shipbuilders. The zone includes the producers of medical syringes, bio fish food, and solar panels. And that's not the full list.
There's an idea to create another SEZ in Astrakhan Oblast, the port SEZ. It'll be a major container terminal, part of the north-south transport route. Right now, major cargo traffic from India and China bypasses Russia. That's a missed opportunity. So they built a special economic zone. There are thousands of containers in the port. They won't transport all of them along the Volga river. That means this facility will definitely be busy.
They don't always arrive here on their own. They come here from all over Russian and Kazakhstan. Sometimes they're older than 30. But that's not a reason to write them off. A warm welcome awaits locomotives in Astrakhan.
The facility produces the majority of used parts. Right now, they're going smelt diesel bearings made of bronze; it has greenish color. All required parts, and everything that's required to resurrect a locomotive, from the paint job to the reassembly of the giant engine.
- How long does it take to repair a locomotive like this? Is it finished?
- Yes, this TM-2 locomotive has been repaired. A complete restoration takes 14 days.
The Astrakhan facility that's part of the Lokotekh group is the largest rolling stock repair facility in the south of Russia. The facility has enough orders for at least two years.
Denis Martyanov, acting director: "In 217-2018, we planned to produce 191 sections. This year, 2019, we plan to build 242 locomotive sections. That's 170 locomotives for our clients from RZhD and 72 locomotives for the production market of the Russian private companies.”
It would seem that nothing can happen to a locomotive wheel-pair, that's 2.5 tons of metal. But no. It wears down pretty quickly. It wears down as quickly as car tires. One has to change shoes once every three years.
This material is called EVA. It's not some toxic plastic. Experts claim that it's a green material. In seven minutes, it'll become shoes. This machine basically cooks it. Here are the finished slippers.
Rinat Shakirzhanov, sales manager: "We make more than 300 types of shoes. Here, you can see our beach shoes, kids' shoes, and teenager shoes."
Now, they produce 300 models. They've also started to sew clothing.
- It looks nice. I'd gladly wear one myself.
Rinat Shakirzhanov: We produced this one quite recently for our emergency services.
As it often happens here, the facility had to endure hard times. The facility manages to restore the production from the ruins of a rubber boot factory of an all-USSR scale. Now, it produces up to two million pairs per year.
- Do you sell your shoes all over the country?
Nina Teresheva, CEO: "We sell it all over the country. We even export some of our shoes. We have commercial facilities in Kazakhstan. We sell our shoes there. We also export them to Turkmenistan, Azerbaijan, Ukraine, and Belarus".
These shoes, manufactured with a complex production process, manage to compete with China, which is close on its heels with its cheap boots.
- How much do you invest in development and what are your plans?
Nina Teresheva, CEO: "Every year, we invest fifty-sixty million, sometimes even more. Every year, we invest between fifty and one hundred million rubles in the development of the facility".
Be it a company that puts huge locomotives on rails, or a company that produces tiny kids' shoes, everybody needs support from investors and the government. Recently, a support element has appeared in the region. It's called the Industry Development Fund of Astrakhan Oblast. The idea is the following. Let's assume you produce, here's an obvious example, shoes. You require new equipment, but your funds are scarce. The regional fund, which can be assisted by the federal one, is ready to provide an easy loan at a 1-5% interest rate. In addition, the oblast can provide a production upgrade subsidy of up to five million rubles ($76,500). Getting a loan under conditions other than draconian. Subsidies for small and medium businesses are sometimes vital. Small companies play a huge role in the development of Astrakhan's agriculture.
Plant a stick in the ground and it'll sprout roots. This saying is true in Astrakhan Oblast. On average, one hectare in Russia "gives off" 63,000 rubles ($960) worth of produce. In Astrakhan, it's 523,000 rubles ($8,000). Cucumbers, peppers, cabbage, carrots, and rice, two crops of potatoes per year, 20% of Russia's onions and 40% of tomatoes grow here. It's Russia's number one farming region.
- We were told that everything grows here.
Sergey Morozov, acting governor: "Indeed. We're the garden of our country. In fact, Astrakhan Oblast is one of the top regions that ensures the food security of our country. We're Russia's top producer of vegetables and cucurbits, more than two million tons in 2018. During the Soviet era, the plan was below one million, mind you. The investment portfolio for the next few years has almost been calculated. We're getting 150 projects worth about thirty billion rubles ($500 million). We hope and believe that it'll allow us to create new jobs and propel our regional economy forward.”
For example, the oblast produces 40% of all of Russia's tomato paste. Another facility is being built for six billion rubles. Despite the enormous crop yield, 34% of the farmland is still unused. Support to the farmers is vital, even more so, considering that the five-year plan implies to increase vegetable production by a million, breed 20% more livestock and fowl, and increase exports by up to $314 million. And we haven't even talked about fish.
There's a thing called regional brand. It's registered by Rospatent. There are some registered brands from Astrakhan: tomatoes, camels, watermelons, roach, and, naturally, beluga caviar. It rivals oil in being called black gold.
Just don't drop it, we beg you, the employees of the facility whispered to me before we began shooting. A 250-gram jar of beluga caviar may cost 60,000 rubles in a store. The tub had about five kilograms. The caviar was made expensive by humans who disrupted the natural balance, built power stations on breeding grounds, and poached.
- Do I understand it correctly, that if not for the facilities similar to yours, we'd have lost all of this fish, all of the sturgeons and belugas, they would've gone extinct like dinosaurs?
Alexander Latunov, director's advisor: "Without a doubt. 80-90% of the sturgeon fish population in nature is only replenished by sturgeon fish farms."
The employees of this farm don't really care how much caviar costs on the market. The majority of the products aren't for sale. This is the largest beluga in the shop. She weighs 184 kilograms. Nobody knows how old it is. she was caught in a river 20 years ago specifically to breed her here. You're witnessing the caviar production process. The milking. It may not seem too comfortable but at least the fish stays alive.
Here's what a sturgeon maternity home looks like. These tubs imitate river currents. Here's the caviar. In six days, larvae will hatch out, that's the correct way to say it. Take this pool, number 207, for instance.
- I take it that many years later, this larva will become a grown-up fish that you can harvest caviar from?
Sergey Ivanov, lead engineer: "That's right. At least ten years. Some species, beluga, for instance, require 15-20 years to reach reproductive age".
There are 269 pools here. Each contains about 5,000 larvae, meaning 2.5 million in total. Sturgeon, beluga, and sterlet. When they gain about 3 grams of weight they'll be released into the river.
- How many do you release in one year?
Sergey Ivanov, lead engineer: "A little less than a million, according to the government guidelines. In addition, we release half of that number within the framework of compensation measures. We release a little over a million on average."
Unfortunately, the majority of the baby fish die. That's natural. Still, Russian fish farms and their Caspian neighbors are slowly restoring the sturgeon population. Moreover, these young people with PhDs develop aquaculture in laboratories, breeding fish for sale. This is the only sturgeon breeding factory in Russia.
- One may call this place a registration office, right?
Natalia Kozlova, fish biologist: "Sure. We carry out the passportization of sturgeon fish in aquaculture. We submit all of the data about the fish and get a comprehensive passport that every fish in the aquaculture must have. to help contemporary science".
Sergey Morozov, acting governor: "In 2018, we produced, caught, 64,000 tons of fish from the so-called aquaculture. Our region now ranks tenth in terms of fish production".
The authorities have several proposals that will increase the numbers. Introducing complex reservoir maintenance rules. Some supply water to the river and some don't. Fish can't breed in such an unstable situation. Introducing the concept of an "avandelta," the shallow waters of the Volga close to the sea, and allowing fish capture there without any additional licenses.
This facility also has fish in mind. How do we breed it, big or small? How do we catch it? Why do we catch it? These are the wrong questions. The correct one is: What do we use to catch it? What happens when fish gets scarce is not a secret for the Astrakhan net-weaving factory. It's 107 years old. That's the only similar facility in Southern Russia.
Anatoly Bychkov, CEO: "The factory used to be the largest facility producing nets for inland waters on an industrial level. 110,000 nets. Now, we produce only 25,000 per year".
Net production (and there are 40 types of nets) has plunged not only because people don't fish as often now. The factory got caught in its own net. New materials are durable. Why would a fisherman buy a new net if his old one is intact? Still, nobody loses heart. The development of aquacultures plays into their hands.
Anatoly Bychkov, CEO: "We begin receiving orders from various nurseries. Starting from the north and to the south, our nurseries are in high demand".
The factory also began weaving ropes. The facility doesn't only weave nets and ropes. What do you think this is, huh? It's a washcloth. They can produce any number of these if there's demand... and the right equipment, or rather, the money to buy it. An old machine doesn't weave too well. This advanced machine replaces four old Russian ones in terms of productivity. Russia hasn't produced them since late 80's. This one's Japanese. It's expensive, costs eight million. And yet, the factory is going to buy another four of these.
- Let's hope. They've launched the regional fund, the federal fund may also help. You can expect to get at least some money.
Anatoly Bychkov, CEO: "We expect to get the money. The government is constantly saying that it's going to help the industry".
In Astrakhan, almost everyone will tell you the story of them catching a huge sturgeon on a nail. There are a lot of fishers here, especially on these spring days, when we're filming this episode, they're going crazy over vobla. Well, it's spawning season.
- Did you catch three with one hook?
- Yep, three at a time. Three with a single hook.
Everybody's catching it, a businessman from Moscow, and engineer from Kursk, and a retiree from Volgograd. It's a kind of fish tourism.
We're going to tell you about another tourist destination that's getting increasingly popular here in Astrakhan. It's called medical tourism. The Astrakhan Federal Center of Cardiovascular Surgery ranks fifth among Russia's best clinics. The specialists working here get patients from all over Russian and abroad. But that's on the second hand.
On the first hand, those in need of emergency medical help are brought here. We have a unique opportunity to see a life being saved. However, these people call it "routine work." The equipment is the most advanced. The medical director even jokingly says that he's a bit scared of it.
- Is this your most advanced operating room?
Dmitry Tarasov, medical director:
- Yes. It has a lot of screens, a lot of programs that allow us to monitor all vitals of the patient and thus improve our results.
Dmitry Tarasov hasn't held a meeting in seven years. Not a single one. He saves time. For this purpose, a unique computer system has been implemented at the center. It's in charge of all paperwork.
Dmitry Tarasov, medical director: "Previously, in order to perform a surgery, we needed three hours and three more hours to fill out the paperwork. Now, it's done in a fraction of a second."
The center is ten years old. Over this time, wait for it, 53,000 surgeries have been performed here. That's about 5,500 per year and 25 per day, on adults and infants, open heart surgeries and minimally invasive ones. Each operation costs half a million rubles. They're paid for by the state.
Dmitry Tarasov, medical director: "That's a small figure for Russia. We need to do twice as many. Not five thousand, but ten. Then, our mortality issue will decrease. I want you to realize that through and through: We actually influence the mortality rate in the Russian Federation. Every high technology we produce saves a life.”
There will be even more advanced hospitals in the region. Sergey Morozov told us about the Year of Health that's not limited to a single year, of course.
- Could you elaborate on that? What is it about? What will the citizens get from it?
Sergey Morozov, acting governor: "We've started designing a medical center. We're building a pre-natal center at the regional hospital. We're also building a diagnostic facility at our oncology center. We desperately require one. The equipment is outdated, so we'll upgrade it. We've got money to do that".
On top of that, the kids' hospital will get a new surgery wing. On top of that, medical help will be accessible all across the region: 20 health posts, the Health Belt program where doctors travel to their patients with all necessary equipment. On top of that, there will be weekend hospitals. On top of that, it's all pretty expensive but they managed to find nine-something billion rubles. The search for specialists continues.
Sergey Morozov, acting governor: "We're launching the Governor Reserve project within the framework of our regional development strategy, we called it the Strategy of Action. Young people under 45 will have a chance to make a name for themselves".
Jobs, wages, and medicine. There's another key aspect. To make people stay, the region must be convenient, safe, and finally beautiful. For that purpose, the New Astrakhan project has been launched, which is much bigger than the city itself. It's all aimed to change the level of social-economic development that we've mentioned in the beginning.
It's the Year of Health in Astrakhan Oblast. However, metaphorically speaking, the entire economy is getting healthier. We've seen the lost being restored, the present being made more stable with the help of specialists, in an attempt to grow a strong economy on this ground.
