Vladimir Putin has chaired a meeting in Severodvinsk on the development of the oil and gas sector of the Russian Federation.Part 2
11 July 2008
Вступительное слово В.В.Путина.
11.07.2008
In response to these government actions, the oil companies - as my colleagues told me today - have committed to redress a drop in production by the end of the year. I would like to hear from the heads of our companies today. I see some of them in this room. I would like to hear your opinion on the measures taken and what the government is planning for the near future.
Of course, administrative barriers should be removed. Above all we are talking about a mechanism whereby the producer, after obtaining a license to exploit the field, would not have to spend years to obtain other permits, including land rights. But the Federal Agency for Natural Resources will strictly monitor compliance with all license requirements. The corresponding procedure must be prepared and introduced as soon as possible.
The state is prepared to contribute to broadening the resource base of the fuel and energy sector. The government has approved a long-term programme for the exploration and reproduction of the mineral and raw materials base to the year 2020. I talked with the Finance Minister just this morning. He assured me that everything has been agreed with the Ministry of Natural Resources. Is that so? I would like to hear from Minister Yury Trutnev today. As far as I know, there are still some hitches. I would like the final decision to be made quite openly.
We cannot progress without introducing modern resource-saving technologies, without more effective use of raw materials.
Indeed we have been lamenting the barbarous burning of accompanying oil gas far too long. All the necessary instructions on this have been given, and they must be fully implemented. This refers to transportation and energy network access by resource producing companies.
I would like to draw the attention of Alexei Miller (Gazprom CEO) to the fact that oil and gas companies still experience some problems accessing your networks. Don't shake your head. They do. If this situation remains we will go on burning the accompanying gas in huge quantities. And you will be spending huge resources to increase your own company's output. It is in the corporate interest. Controlling the networks requires that you bear in mind the country's interests. Please keep this in mind, and proceed accordingly.
Let me remind you that we have set a goal for using 95% of accompanying gas effectively by 2011. The Ministry of Natural Resources proposes to extend the deadline by another year. I would like to hear the argument in favour of that position today.
I believe that we should make more active use of economic incentives and require all market participants answer for the irrational use of this valuable material.
Further, the formation of a stable market for petroleum products is emerging as a priority.
A curious situation is developing. It should be more profitable, considering the transportation cost, to sell petroleum products in the domestic markets than to export crude oil.
One would think that supply in the home market would increase. However, the country is increasingly short of quality fuel.
What should be done to solve the problems of the domestic market? Above all, competition should be promoted.
More concerted measures are needed to saturate the market and remove unnecessary middlemen. Of course, the middleman performs an important function in a market economy. But there should be no speculation. The government's efforts must be aimed at establishing understandable and transparent pricing rules.
First, the Federal Antimonopoly Service must actively join this process. You must all consider, together with producers, the possibilities of selling leftover oil and petroleum products by open tender. What do I mean by leftovers? After the companies have met their commitments under long-term agreements, export contracts and to strategic reserve, all the rest must be sold in the market.
Secondly, it is necessary to follow through on all earlier made decisions to develop and stimulate exchange trade. And also to form a market of derivative financial instruments for which the main commodities are crude oil and petroleum products.
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