|                                                                                                                                                             |  | REGIONAL CORNER: KAMCHATKA OBLAST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | September 1997by Laurel HendersonKamchatka oblast in northeastern Russia is comprised of a peninsula roughly the size of California
and two nearby islands.  Facing the Bering Sea, the Sea of Okhotsk, and the Pacific Ocean,
Kamchatka is a major fishing center in the Russian Far East.  Once open only to senior Soviet
officials for recreation, Kamchatka still has a relatively unspoiled natural environment.   The
oblast's natural resources include various minerals and metals and substantial timber reserves.Fishing and Shipping 
Fish and fish products constitute 90 percent of Kamchatka's exports, although local fishing and
processing companies are badly in need of investment.  Currently, nearly 150 Kamchatka
companies harvest and process salmon, crab, cod, and caviar.  Production has continued to
increase in the past few years, offsetting declines in other local industries.  Financing, fishing boat
construction, and licensing procedures have been identified as areas in particular need of
improvement.  Future development plans also include harvesting local rivers, and constructing
fish-breeding plants and fish-processing facilities.Accessible only by air and sea, the oblast government hopes to make Kamchatka a Pacific Rim
transportation hub.  The capital, Petropavlovsk-Kamchatskiy, is the oblast's leading port and
handles petroleum, fish, wood products, and general cargo.  Petropavlovsk is home to a number
of maritime enterprises, including Petropavlovsk Shipyard, which merged in 1992 with the
largest fishing company in the RFE, Dalmoreprodukt.  Besides cargo handling and general ship
and equipment repair, Dalmoreprodukt is now heavily involved in fish processing and is one of the
largest companies in the oblast.Energy and Natural Resources
Currently, Kamchatka relies on imported fuel to support 96 percent of the local economy.  To
ease this dependence, the European Bank for Reconstruction and Development is supporting
construction of a 12-MW geothermal plant at Verkhne-Mutnovskiy.  A number of rivers in the
oblast are potential sites for construction of hydro-electric power stations.Silver, mercury, platinum, copper, and zinc are present in Kamchatka, along with large reserves of
coal.  Two Russian-American joint ventures are exploring gold deposits.  The region is also
heavily forested.  Due to underdeveloped technology, logs are the primary forestry export. 
Kamchatles is a leading timber company that hopes to upgrade its operations by purchasing
equipment from the United States.Tourism
Kamchatka's breathtaking landscape lends itself to the development of an eco-tourism industry. 
Local officials hope that the snow-capped volcanoes, geysers, hot springs, cliffs, forests, and
wildlife will draw outside visitors.  For now, though, Kamchatka lacks the infrastructure to
support a large influx of visitors.  Alaska Airlines provides regular service to Petropavlovsk-Kamchatskiy International Airport, which opened a new terminal in 1995.  The Sogzhoy
Company, a large local tourism firm, owns a hotel and tourist center and organizes excursions
throughout the region.  A tourism association is being formed with the intention of working to
reduce the administrative requirements for visiting Kamchatka and to market the region
internationally.Increasing transportation costs and the resulting isolation from European Russia have led
Kamchatka and the RFE to strengthen ties with the Asia/Pacific region. Petropavolvsk hosted the
May 1997 meeting of the U.S. West Coast Russian Far East Ad Hoc Working Group. 
Given Kamchatka's proximity to the northwestern United States, it has the potential to become
both a frequent destination for travelers as well as a gateway to the rest of the Russian Far East. 
For more information on Kamchatka, visit BISNIS Online at
www.mac.doc.gov/bisnis/cables/960613ru.htm.Laurel Henderson works for BISNIS in Washington, D.C.  Svetlana Kuzmichenko, BISNIS
Representative in Vladivostok, contributed to this article.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)