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The meeting was attended by Bloomberg News International Government Executive Editor Rosalind Mathieson (USA), Associated Press Vice President Ian Phillips (USA), Xinhua Editor-in-Chief He Ping (China), Kyodo News Executive Director Hiroki Sugita (Japan), Deutsche Press-Agentur Chief Executive Officer Peter Kropsch (Germany), Anadolu Agency Editor-in-Chief Metin Mutanoglu (Turkey), EFE President Jose Antonio Vera (Spain), Press Association Chief Executive, President of the News Agencies World Council (NACO) Clive Marshall. Russia was represented by TASS Director General Sergei Mikhailov.

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President of Russia Vladimir Putin: Ladies and gentlemen, friends, colleagues, guests,

Let me welcome all of you in St Petersburg. Thank you for taking an interest in our work at the St Petersburg International Economic Forum.

Meetings like this have become a tradition. This is a special venue where you can talk to each other (I don’t think that your work schedules allow you to see each other often enough) and which gives us an opportunity to listen to you and state our position on what are generally major issues that are of great interest, in your view.

You have heard my address at the St Petersburg International Economic Forum and my colleagues’ addresses as well. On the whole, the agenda is clear, as is Russia’s position on key issues. So I will skip the long introduction and go straight to the discussion, questions and answers, your comments or my comments, so that our meeting today is productive and useful.

I suppose I’ll stop here. Thank you for listening and let’s begin.

TASS Director General Sergey Mikhailov: Thank you very much for your time, Mr President.

You have already said everything in your introduction, right off the bat.

We have a tradition. Last year, though, members of the fairer sex were not at our table but this year Rosalind Mathieson from Bloomberg is here. John Micklethwait just did a great job moderating a session, in my opinion. So please, over to Bloomberg. Rosalind, go ahead.

Bloomberg News International Government Executive Editor Rosalind Mathieson (USA): My question actually is about OPEC and oil. Russia and Saudi are in talks about an easing off of the OPEC Plus…

Shall I start again? Thank you.

Russia and Saudi are in talks on potential easing off of the OPEC Plus agreement that caps output. I’m curious as to why that is. Is that because oil prices are too high? Is it because the US President has been pressing OPEC? Or a combination of that? I’m wondering also what is the preferred price for oil for Russia?

And if I might be so cheeky as to ask a very quick second question. Will you tell us here today that you will indeed step down at the end of your next term? Thank you.

Vladimir Putin: I will start with your last question. I have always acted strictly in keeping with the Constitution of the Russian Federation. It is clearly set out in the Constitution that a person can serve no more than two consecutive terms. I am currently in my second term. The limit is two consecutive terms.

You may remember that I served two presidential terms before, but after that I left the office, because the Constitution did not allow me to be elected for a third consecutive term. This is all there is to it. I intend to follow this law in the future as well.

I hope that I answered your second question.

As for your first question, we have developed business-like relations with a number of OPEC members and cooperate with them quite constructively. I am referring primarily to Saudi Arabia and our cooperation in the energy sector. There are many questions in this regard, but we have common ground in quite a few areas.

As you know, we took a decision to limit oil production to respond to what we saw as unfairly low oil prices. When the price of oil reached $60 per barrel, I mean around $60 or slightly above $60, we believed this to be a balanced price that was sufficient to make plans for the industry and invest in it. A higher price can be an issue for consumers, which is something major producers want to avoid.

The upsurge in the price of oil we are currently witnessing is beneficial for the Russian budget. On the one hand, Russia’s currency reserves are growing, and last year we had a trade surplus of $130 billion. These are all positive developments, but this is only one side of the story. On the other hand, we understand that this empowers our competitors, including US shale oil producers, as they take some market share. We have nothing against them, especially since much of the oil they produce is consumed domestically. However, we are not interested in the prices of energy resources and oil growing indefinitely.

You asked me what I believe to be a balanced price. I mentioned it. A price of $60 per barrel, whether fair or not, suits us.

Having all the parties involved in the talks on a production cut come to an agreement was not an easy task. It was not easy to strike a deal with some of our partners. I am referring to Iran, since the country had to cut its production, while demanding exclusive terms regarding production volumes. At the end of the day, we were able to strike a balance that was acceptable to all, and everyone benefited from what came out of this agreement.

Even before President Trump decided to withdraw from the Iran deal, we agreed with our Saudi partners to continue our consultations. It is also important that the supply on the global market be taken into consideration. In fact, the reserves were gradually shrinking as consumption started to increase around the world. We took all these factors into consideration and agreed to continue our consultations. To be honest, our arrangements were never intended to remain in force forever.

So there is nothing unusual here. We are working on these matters in keeping with our agreements. Time will show what happens in the future. Of course, a lot will depend on whether the Iran nuclear deal remains in place or not, and the way it affects the global energy market. We will see.

We believe that the global energy market is currently balanced, since excessive reserves are leaving the market. Overall, the market price must be fair. There is no place for artificial restrictions driven by politics. All they do is hurt the global economy instead of benefiting it.

Sergei Mikhailov: There is an organisation known as the News Agencies World Council (NACO). Mr President, we hold conferences within the framework of this forum – we have held five conferences this year. The president of NACO is a man I respect, Clive Marshall, who is also the CEO of the Press Association (PA), the national news agency for the UK and Ireland that marked 150 years since its inception last week.

(Addressing Clive Marshall) Clive, I would like to express my best wishes on this occasion. Your question, please.

Press Association Chief Executive, President of the News Agencies Clive Marshall: Mr President, the UK government has blamed Russia for the poisoning of the Skripals in Salisbury, sparking the expulsion of 150 of your diplomats from nearly 30 countries and severely impacting the relations with the West. The head of Britain’s MI5 agency says your officials have put forward 30 different theories of what happened to the Skripals. He even accused the Kremlin of barefaced lying.

Mr President, given your experience and your time in the KGB, what do you think is the most plausible explanation for what happened to the Skripals and the poisoning, and what steps can you and the UK Prime Minister Theresa May take to start to rebuild the relationship and the trust between Russia and the UK?

Vladimir Putin: As for this unpleasant event, we have spoken on this subject more than once. We said that the most objective explanation to what happened can be only provided as a result of a thorough, unbiased and joint – the latter is very important – investigation. We proposed working on it together from the very beginning, but as you know, the British side rejected our offer and investigated the incident alone.

It is also a fact, as this was announced at the very beginning, that the victims were poisoned – if it was a poisoning – with a chemical warfare agent. I have spoken about this before, but I will say again that although I am not an expert on chemical warfare agents, I can imagine that the use of such agents should result in the almost instantaneous death of the victims.

Thank God, nothing like this happened in the case of the Skripals, and that Skripal himself and his daughter are alive, have been discharged from hospital and, as we have seen on television, his daughter looks quite well. Thank God, they are alive and healthy.

Therefore, I believe it would be wrong to say that it was a chemical warfare agent. If so, everything the British side has said can be called into question.

How can we settle this? We should either conduct a comprehensive and objective joint investigation, or stop talking about it because it will only worsen our relations.

Sergei Mikhailov: Let us move to the east. Our old partner and good friend is a news agency that has been developing very quickly and now works in all imaginable and unimaginable formats in 15 languages. It is the Xinhua News Agency from China. Xinhua’s editor-in-chief, Mr He Ping, is attending our meeting for the first time.

Mr He Ping, please, you have the floor.

He Ping (retranslated): Mr President, first of all, I would like to congratulate you on your re-election as President.

Our relations are developing under the guidance of President Xi Jinping and President Vladimir Putin and are currently the best ever. You will be making a state visit to the People’s Republic of China soon, where you will attend the SCO summit in Qingdao. I would like to ask about your plans for strengthening Russian-Chinese strategic partnership and cooperation during your new presidential term, including the integration of the Eurasian Economic Union (EAEU) and China’s Belt and Road initiative. What should be done to reach new achievements?

You plan to attend the SCO summit in Qingdao. What are your expectations for this meeting?

Vladimir Putin: There is no need to talk about the level of Russian-Chinese relations. We describe our relations as a privileged strategic partnership, which is absolutely correct. We have a concrete plan of interaction and expanded cooperation.

As for politics, I believe that the latest decisions adopted at the congress of the Communist Party of China have created additional solid conditions for deepening Russian-Chinese relations, because they are adding stability to our relations and creating conditions for forecasting joint actions not only for the medium but also for a historically longer term. This is becoming a major factor in Russian-Chinese relations. This is the first thing.

The second is that we have mapped out concrete plans for deepening our interaction in different spheres of the economy, if we are speaking about economic ties.

China is our largest trade partner with bilateral trade estimated at over $86 billion. I do not doubt for a second that our trade will grow to $100 billion a year or more if we continue at this pace.

I am especially pleased at the diversification and structural improvement of our trade. For example, Russian engineering supplies to the Chinese market continued to increase last year and have reached more than 9 percent. This is a sustainable trend, which is especially good.

We are increasing cooperation in the high-tech sectors where both sides have things to offer. We are also promoting investment cooperation. China is one of the largest investors in the Russian economy.

China is a reliable partner. It has implemented large projects under the guidance of President Xi Jinping. I do not think they would have been implemented without his direct support. These projects are certainly benefitting the Russian and Chinese economies. I am referring to the projects in the traditional (hydrocarbon) and nuclear power sectors, our first but surely wise steps towards developing unconventional types of renewable energy, our cooperation in mechanical engineering and space exploration, where we can make very great strides soon, as well as aircraft manufacturing and the chemical industry. There is also agriculture. We strongly hope that we will develop production and investment in this sphere, and that we will work more energetically in each other’s markets.

And finally, regional cooperation. This is becoming increasingly diverse. We are exploring infrastructure opportunities, building roads and bridges, and establishing direct ties between regions and the heads of the Chinese provinces and the Russian territories and regions across the border.

Taken together, this means that we have good prospects. We will work to implement them jointly on both sides.

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