TITLE:                   OVERVIEW OF MURMANSK REGION

SUBJECT COUNTRY(IES):    RUSSIA

POST OF ORIGIN:          RUSSIA

SERIES:                  INTERNATIONAL MARKET INSIGHT (IMI)

ITA INDUSTRY CODE:       INV

DATE OF REPORT (YYMMDD): 991201

DELETION DATE (YYMMDD):  201201

AUTHOR:                  MARINA KAMAYEVA

APPROVING OFFICER:       STUART SCHAAG, COMMERCIAL OFFICER

OFFICER'S TITLE:

NUMBER OF PAGES:         8

Summary:   This report presents a brief overview of the Murmansk
Region and provides general information on its major industries,
investment opportunities, geographical location, and
population.  The report is based on information provided by the
Murmansk Administration to FCS staff during our recent visit to
Murmansk and on official statistics developed by the Murmansk
Regional Committee for Statistics.  Companies interested in
opportunities in the Murmansk Region should be aware of a
planned presentation by Murmansk officials to the American
Chamber of Commerce in Russia in February 2000.  Topic text
continues in paragraph 3.  End Summary.

1. GOLD KEY SERVICE:  U.S. companies interested in gaining
access to prospective business partners in St. Petersburg and NW
Russia are encouraged to utilize our very effective oGold Key
Service.o  Experienced Commercial Specialists identify
opportunities, arrange business appointments with pre-qualified
Russian agents and distributors, and accompany you to the
meetings. The current charge for our Gold Key Service is $500
for 4-6 meetings (1-2 days of appointments), and $150 per
additional day of appointments (maximum 4 appointments per
day).  Major credit cards accepted. Driver and professional
interpreter services can be arranged for an additional fee. We
require sufficient company literature at least three weeks prior
to the desired appointment dates.

2. WEBSITES & OTHER SERVICES:  The Department of Commerce's
US&FCS office in St. Petersburg offers a range of services to
U.S. companies interested in doing business in NW Russia. In
addition to traditional FCS services (such as the Agent
Distributor Search), in our offices at Nevsky Prospect 25 we
provide a conference room for up to 20, free computer and local
telephone line use, and we can provide fee-based translation,
business card and color printing services upon request.  For
more information, visit us at:  owww.usconsulate.spb.ru/fcs.o
American exporters and investors may wish to visit the Commerce
Department's BISNIS website site at:  owww.bisnis.doc.govo

3. The Murmansk Region is located in the northern most territory
of Northwest Russia on the Kola Peninsula, above the Polar
Circle.  However, the climate benefits from the warming
influence of the Gulf Stream current.  The region covers an area
of 144,900 square kilometers and extends 405 km from north to
south and 536 km from east to west.  The region borders Finland
to the west, Norway to the north, and the Republic of Karelia
(another region of Northwest Russia) to the south.  The total
population is 1.6 million people.  Sixty-four percent of the
population is of working age.  The region has 12 cities and 20
small towns.  Ninety-two percent (92.2%) of the total population
lives in cities and towns.  The Kola Saami (Lapps), native
aboriginal population of about 2,000 people, live in the
Lovozerovo and Kola administrative districts.  The city of
Murmansk is the region's administrative center.  Due to the
region's proximity to Norway and Finland, Murmansk Airport
conducts international flights to several cities in both
countries.  Murmansk is also the location of a commercial
seaport on the Barents Sea, which operates year-round with the
assistance of icebreakers.

- - - - - - - - - - - - -
Natural Resources
- - - - - - - - - - - - -

4.  The Murmansk region is rich in natural resources with over
700 minerals, of which 100 were first discovered in this
region.  The Oblast has 200 deposits of 40 types of minerals,
including: apatite-nepheline ore, titanium, rare metals,
copper-nickel ores, feldspar, mica, oil and gas.  Forty-five of
these deposits are currently operational.  The Murmansk region
has 35 percent of the phosphate stocks of the entire stocks
available in the Newly Independent States (NIS), 30 percent of
the non-ferrous metals and 80 percent of the rare metals, 75
percent of phlogopite, 93 percent of kyanite, 37 percent of
feldspar and pegmatite, and about 4 percent of iron ores in the
NIS.  The estimated stock of titanium deposits is about 50
million tons, and the development of these deposits is of
special interest and concern to the local government.

5.  Although oil and gas resources in the region are extensive,
their development will require considerable investment.  The
large East-Barents and the West-Kara oil reserves are located in
the Barents and Kara seas.  According to local research
estimates, prospective oil fields could potentially yield up to
40 million tons in the next 10-15 years.  Natural gas resources,
in the unfreezing part of the Barents Sea, are estimated at one
billion square meters.  The world's largest gas condensate
field, Shtokmanovskoye, is located on the Barents Sea shelf, 600
kilometers off the coast of the Kola Peninsula.  Its gas
resources potential production is estimated to be 3 billion
cubic meters.  Other large gas fields are still undeveloped,
including Ledovoye, Ludlovsk, Severokildinsk, Murmansk, Pomorsk,
and Severogulyayevsk fields in the East Barents Seas, as well as
Rusanovsk and Leningrad fields in the Kara Sea.

- - - - - - - - - - - - - -
International Trade
- - - - - - - - - - - - - -

6.  Murmansk is an export-oriented region.   In 1998, the
region's exports were USD 933 million. The primary exports of
the Region are non-ferrous metals (42.3 percent), mineral raw
materials (31.1 percent),  and food products and agricultural
products (22.2 percent).  Imports into Murmansk totaled USD 202
million and included equipment for the mining and metallurgical
industries (26.3 percent), chemicals (22 percent), and
agricultural and food products (22.1 percent).   Locally
produced goods are primarily exported to Norway, Sweden, the
Netherlands, Finland, and Switzerland.  The majority of imports
come from Norway, Finland, Great Britain, Germany, Sweden, and
the Netherlands.  The peak year for foreign trade for the past
seven years in Murmansk was 1997, with total trade turnover of
USD 1.56 billion.  After the crisis, in 1998-1999, exports
decreased by about 30 percent, while imports u by about 20
percent.

- - - - - - - - - - - -
Industrial Profile
- - - - - - - - - - - -

7.  The Murmansk economy is dominated by the industrial sector,
accounting for 90 percent of the region's revenues.  The primary
industries in the Murmansk Region are mining and metallurgy,
along with fishing and power generation.  Local industries'
shares of the region's revenues are as follows (according to the
1998 Report of Murmansk Regional Committee for Statistics):

Non-ferrous Metals                                      32.6
percent
Power Generation
22.5
Fishing and Food Processing                     17.1
Mining and Chemical Industry                    10.9
Ferrous Metals                                   9.9
Metal-Working and Machine Building               3.9
Construction Materials                           1.0
Forestry and Pulp and Paper Industry
0.4
Other Industries                                         0.3

- - - - - - - - - - - - - - - - - - - -
Major Industrial Companies
- - - - - - - - - - - - - - - - - - - -

8.  Ninety percent of the Oblast's total production outcome is
supplied by the region's major companies, such as
Pechenganickel, Olcon, the Kola Nuclear Power Plant, Murmansk
Trawl Fleet, Sevrybkholodflot, Murmanrybprom, and Murmansk
Shipping Company.

9.  Non-ferrous Metals:  The Murmansk Region produces almost 100
percent of Russia's apatite concentrate (3.7 million tons in
1998), 43 percent of nickel, 15 percent of copper, 12 percent of
iron ore and iron ore concentrate (17.7 million and 6.4 million
tons in 1998), and 40 percent of cobalt.  The region is the sole
supplier of nepheline concentrate in Russia and the largest
producer of alumina, vermiculite, muscovite, and several other
types of mining elements and minerals.  The metallurgical and
mining industry is represented by such large companies as
Severonickel in Monchegorsk (nickel and other non-ferrous
metals); Pechenganickel in Pechenga (nickel; non-ferrous
metals); Kandalaksha Aluminum Plant in Kandalaksha; Apatit in
Apatity; Olenegorsk Mining; Lovozerovo Mining Plant; Kovdorin
Mining Plant; and Kovdorslyda Plant.  In addition, there are
large reserves of scrap metal of 800,000 tons, with an estimated
annual increase of 100,000 to 150,000 tons.   Severonickel and
Pechenganickel are owned by the Norilsk Nickel Corporation.
These companies export 95 percent of their production.
Severonickel, located in the city of Monchegorsk, employs 11,800
people and manufactures nickel, copper, cobalt, and precious
metals concentrates.  Pechanganickel produces raw materials for
the production of nickel, copper, cobalt, precious metals, and
sulfur acid.

10.  Power Generation:  Kolenergo Energy System includes 17
hydro-power plants, two co-generation plants, two energy network
operators, an experimental power plant, and some others.
Kolenergo is a part of the United Energy System of Northwest
Russia.  Together with Kola Nuclear Power Plant, Kolenergo fully
satisfies the demand for power in the Murmansk Region and
provides power to the Republic of Karelia, Finland, and Norway.
The Kola Nuclear Power Plant was constructed in 1973.
Currently, it produces half of the energy in the Oblast.

11.  The fishing industry, according to the managers of the
Murmansk Trawl Fleet, is currently the most successful industry
operating in the Region.  The Murmansk Oblast supplies 16
percent of Russia's fish production.  The Murmansk Trawl Fleet
owns 86 fishing vessels that fish in the Barents Sea, in the
Northwest Atlantic, and in the waters around the African
continent.  In 1997, the Murmansk Trawl Fleet used 19 percent of
the Russian-Norwegian quota for fishing in the Barents Sea.
Seventy to eighty percent of the catch of Murmansk fishing
companies is exported to Norway, Denmark, Germany, Canada, and
Great Britain.  Most of the fish processing takes place in these
countries.

12.  The Apatit Joint Stock Company manufactures phosphorus raw
materials for the production of fertilizers.  The company's
major product is apathite concentrate.  Over 80 percent of
Russia's exports of this product are manufactured in the
Murmansk Region.   In 1997, Apatit produced 15.6 million tons of
ore, 3.2 million tons of apathite concentrate, and 939,000 tons
of nepheline concentrate.  The major mining companies are Olkon
(iron-containing ores) and Kovdor Mining Company  (iron,
apathite, and magnetite ores and concentrates).

- - - - - - - - - - - - - - - - - - -
Research and Development
- - - - - - - - - - - - - - - - - - -

13.  The Kola Science Center of the Russian Academy of Sciences
is located on the Kola Peninsula.  It comprises a number of
research institutes, including Geological; Mining; Polar
Geophysical; Kola Regional Seismological Center; Chemistry and
Technology of Rare Elements and Minerals; and others.  The Kola
Science Center's primary areas of research are the nature of the
Arctic region, the rational use of nature and creation of an
environmentally safe technosphere in the north, and information
technologies.  The Arctic Fishery and Oceanography Research
Institute is also located in Murmansk.

- - - - - - - - - - - - - -
Investment Projects
- - - - - - - - - - - - - -

14.  According to the Murmansk Administration, the priority
areas of investment are projects included in Federal programs,
such as the construction of the Kola Nuclear Power Plant-2.
Also, the largest investment projects in the Region include:

- Reconstruction and up-grading of Murmansk Commercial Seaport;
- Reconstruction and up-grading of the Pechenganickel Plant;
- Construction of an oil and gas terminal in the Pechenga Bay
and respective infrastructure development projects;
- Reconstruction and up-grading of Murmashi International
Airport;
- Up-grading of the Kandalaksha Aluminum Plant's facilities;
- Production of ferrite and strontium powders and magnets;  and
- Scrapping of ships and nuclear submarines.

- - - - - - - - - - - - - - - - - -
Multiplying Organizations
- - - - - - - - - - - - - - - - - -

15.  The region's major association is the North Chamber of
Commerce and Industry, which was established in 1990 as a
non-government, non-profit organization.  Currently, over 100
major companies in the Murmansk Region are members.  The Chamber
assists its members in their search for business partners and
establishes business links between the member-companies and
potential foreign partners.

 16. Another non-profit organization that can successfully
assist U.S. firms in establishing contacts with Murmansk
businesses is Kola Business Development Center (KBDC).  KBDC is
one of the major organizers of the annual matchmaking event
"Kola Partenariat".  According to KBDC, in 2000, this event,
traditionally focused on Scandinavian-Russian business
relations, will welcome participants from other countries.  Both
the North Chamber of Commerce and KBDC provide detailed
information on their activities on the internet.

- - - - - - - - - - - - - -
Contact Information
- - - - - - - - - - - - - -

Murmansk Region Administration
75, pr.Lenina, Murmansk, 183006, Russia
Yury Yevdokimov, Governor
Yevgeny Galkin, Head of International Relations Department
tel: 7 (8152) 486217; fax: 47 (789) 10185
Vladimir Yevseyev, Chairman, Committee for External Economic
Relations
tel: 7 (8152) 477264; fax: 7 (8152) 476503

North Chamber of Commerce and Industry
Anatoly Glushkov, Chairman
10, Rusanova, Murmansk, 183766, Russia
tel: 7 (8152) 472789; 472999; fax: 7 (8152) 473978; 47 (789)
10060 (Norwegian line)
e-mail: ncci@online.ru
Website: www.murmanweb.an.ru/ncci

Kola Business Development Center
Igor Romanenko, Director
Tel/fax: 7 (8152) 428645
e-mail: kbdc@rosmail.ru
Website: http://kbdc.rosweb.ru
Severonickel JSC
Yury Cherikovsky, Commercial Director
Monchegorsk-7, 184280, Murmansk Oblast, Russia
tel: 7 (81536) 35493; fax: 47 (789) 14801

Apatit JSC
Sergey Fyodorov, Director General
1, ul.Leningradskaya, Kirovsk, Murmansk Oblast, 184230, Russia
tel: 7 (81531) 21476; fax: 47 (789) 14124
e-mail: mastr@apatit.murmansk.su

Murmansk Shipping Company
Vyacheslav Ruksha, Director General
15, ul.Kominterna, Murmansk, 183038, Russia
tel: 7 (8152) 455629; 452157; fax: 7 (8152) 452393; 47 (789)
10495
e-mail: super@msco.ru

Kola Scientific Center
Vladimir Kalinnikov, President
14, ul.Fersmana, Apatity, Murmansk Oblast, 184200, Russia
tel: 7 (81555) 79316; fax: 47 (789) 14131
e-mail: root@chemy.kolasc.net.ru

ArcticMorNeftGazRazvedka State Company
Oleg Mnatsakyan, Director General
1, pr.Kolsky, Murmansk, 183032, Russia
tel: 7 (8152) 564519; fax: 47 (789) 10417

Kovdor Mining Plant
Vyacheslav Lyakhov, Director General
5, ul.Sukhachova, Kovdor, Murmansk Oblast, 184140, Russia
tel: 7 (81535) 72734; fax: 7 (81535) 72763; 74286
e-mail: nsv@kgok.murmansk.su

Pechenganickel Mining Plant
Igor Blatov, Director General
26, ul.Lenina, Zapolyarny, Murmansk Oblast, 184415, Russia
tel: 7 (81554) 35977; fax: 47 (789) 13514
e-mail: pechenga@com.mels.ru

Olenegorsk Mining Plant
Viktor Vasin, Director General
2, Leningradsky pr., Olenegorsk, Murmansk Oblast, 184284, Russia
tel: 7 (81552) 58236; fax: 47 (789) 14501
e-mail: admin@olkon.murmansk.su

Kovdorslyuda JSC
Pyotr Vasev, General Manager
7, ul.Konovalova, Kovdor, Murmansk Oblast, 184140, Russia
tel (local): (235) 71375; fax: (235) 71375

Kandalaksha Aluminum Plant
Valery Shamshev, Director General
1, Kandalakshskoe shosse, Kandalaksha, Murmansk Oblast, 184040,
Russia
tel: 7 (81533) 7990; fax: 47 (789) 14127

Central Kola Expedition
Oleg Darshkevich, Director General
23, ul.Komsomolskaya, Monchegorsk, Murmansk Oblast, 184280,
Russia
tel: 7 (81536) 31827; fax: 47 (789) 14147

Kolskaya-2 Nuclear Power Plant
Vladimir Bashlayev, Director General
Kolskaya-1, Polyarnye Zori, Murmansk Region, 184151, Russia
tel: 7 (81532) 64375; fax: 7 (81532) 64547

Murmansk Trawl Fleet
Yury Zinkov, Chairman of Board of Directors
43, ul.Shmidta, Murmansk, 183788, Russia
tel: 7 (8152) 552257; fax: 47 (789) 10405

Union of Northern Fish Producers
6, ul.Kapitana Yegorova, Murmansk, 183038, Russia
tel: 7 (8152) 476728; 476675; fax: 7 (8152) 476940