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President of Russia Vladimir Putin: Good afternoon, ladies and gentlemen,

Thank you for finding the time to come here today. It is a pleasure to see here the heads of leading energy companies from Russia and around the world. I hope that we will have a good and candid exchange of views on the current situation.

I want to note in particular that we are joined at today’s meeting by the winners of the 2012 Global Energy Award. One of this year’s laureates is Boris Katorgin, a leading designer of new-generation rocket engines that have been recognised as the best in the world. Just to give one example, these Russian engines have been powering US astronauts’ flights in space over these last few years. 

”Russia will continue to support fundamental studies and applied research. We see this as a key condition for global leadership in the energy sector and for developing and thoroughly modernising Russia’s energy industry. This industry must be not just a source of resources but a source too, of modern jobs, and create strong demand for new technology, innovative solutions, and smart investment.“

The award was also given to academician Valery Kostyuk, and to UK professor Rodney John Allam, who won the Nobel Peace Prize as a member of the intergovernmental panel on climate change. Specialists describe these laureates’ innovative work on cryogenic systems as representing the technology of the future. 

We realise just how important these kinds of truly revolutionary solutions are. They can lead us to real breakthroughs in ensuring energy security for all humanity, improving the lives of millions of people, opening up new opportunities for space exploration, and for carrying out big new programmes and projects. I congratulate the laureates on their well-earned awards and from all my heart wish them new achievements and discoveries.

Let me stress that Russia will continue to support fundamental studies and applied research. We see this as a key condition for global leadership in the energy sector and for developing and thoroughly modernising Russia’s energy industry. This industry must be not just a source of resources but a source too, of modern jobs, and create strong demand for new technology, innovative solutions, and smart investment.

It is enough to say that Russia’s power plant engineering companies plan to place orders worth around 3 trillion rubles over the coming period. This is a solid investment resource. These orders will be placed with Russian businesses and companies. As you know, we also buy considerable amounts of power plant equipment from our foreign partners.

We will substantially expand the energy sector’s resource base over the coming years, with offshore development of new oil and gas fields, including in eastern Siberia, Yamal, and Sakhalin. We are developing infrastructure and building a series of new energy transport routes, including routes that will supply the Asia-Pacific region countries. I think you are familiar with our supply route development projects given that many of you are taking part in them. They include Baltic Pipeline System-2, the new port in Ust-Luga (not far from here, just to the northwest of St Petersburg), the new oil supply route to the Pacific coast, and the gas supply routes, Background information Nord Stream Nord Stream crossing the Baltic Sea, and  Background information South Stream South Stream in the Black Sea.

In this respect, we thank our Turkish partners for the Turkish government’s recent decision to give us the final go-ahead for working in Turkey’s exclusive economic zone in the Black Sea. We will continue, too, our work to develop big fields such as Vankor, Talakan, and Shtokman in the Barents Sea.

Russia has brought on line more than 12 gigawatts in new electricity generating capacity over the last four years. This is the biggest increase over the last few decades here. Most important is that we are not going to stop here but will continue to expand capacity over the coming years. I am sure that we will reach our targets.

Our nation has long been the world’s largest producer of natural gas. And based on 2011 data, we are now the world’s number one oil extractor in terms of volume, among quoted companies. We are working on implementing a long-term development strategy that will ensure guaranteed energy supplies to the domestic and foreign markets for decades to come. At the same time, we feel it is crucially important to create the most transparent and comfortable market conditions for investment, including for major foreign partners entering the Russian market.

Let me emphasise: we will continue conducting a policy of openness to foreign investment in such strategic sector of Russia’s economy as fuel and energy complex. Incidentally, today companies with foreign participation account for up to 25 percent of oil production in Russia.

”We will continue conducting a policy of openness to foreign investment in such strategic sector of Russia’s economy as fuel and energy complex.“

We frequently talk about how open the Russian market is to foreign investment. We all know that not every nation has such widespread participation by foreign companies in the energy sector. I have just arrived from the G20 summit in Mexico: we know how the oil industry is organised there – it is almost entirely state-owned. And even in a market-oriented nation like Norway, Statoil is basically the only major company, and it is also state-owned.

I don’t think we have a single major company without any foreign participation – not a single one. I cannot think of any such company. Even our leading state company, Rosneft, is also a joint stock company. And 50 percent of investors in our other major – LUKOIL – are foreigners. As I said, 25 per cent of oil production in Russia is done by companies with foreign participation. We feel this is evidence that our economy is quite open.

Let me remind you that just recently, in April or May of this year, we made decisions to create unique tax conditions for implementing joint projects in the Russian Arctic shelf. And I am pleased to note that we are not only creating these conditions, but also inviting foreign partners to work together with us. We have already signed corresponding contracts and agreements with ExxonMobil, our Norwegian partners, and our French partners.

We are also inviting other potential participants to engage in this joint work. We have provided incentives for working at deposits of so-called hard-to-extract oil. And here, too, we are not simply talking about possible cooperation with foreign partners, and not just inviting them; indeed, we have already taken the first serious steps – we have signed contracts for local work.

We are essentially conducting a fine, point-by-point fiscal adjustment in such sensitive area as oil production, in order for the whole line of projects to be attractive to investors, to be truly globally competitive. And we count on reciprocal interest from major foreign companies.

In turn, we would like to see our companies participate in investment projects abroad on an equal basis, with no discrimination. Practice in asset exchanges and counter-flows of investments will certainly serve to strengthen global energy security and stability.

Global energy markets are about mutual responsibility and matching the interests of suppliers and consumers. There cannot be supply security without demand security. Naturally, all of these are fairly difficult issues, but they are difficult on both sides. That is why the approach to risk sharing between all participants in the energy chain – suppliers, transit nations and consumers – should certainly remain high on the agenda.

”The key principle in energy security is the diversification of energy balance structure, the harmonious use of all energy sources, including renewable and environmentally friendly energy sources.“

Another key principle in energy security is the diversification of energy balance structure, the harmonious use of all energy sources, including renewable and environmentally friendly energy sources. I will note that all the promising Russian fuel and energy projects are being implemented while taking into account international environmental and technological security requirements.

We feel certain that the challenges of ensuring economic growth should not undermine the interests of protecting the environment, climate and biodiversity of our planet. In this regard, I would like to emphasise the importance of developing peaceful, safe nuclear energy. We gave a great deal of attention to the topic of nuclear safety at the last G8 summit in Deauville. And I have to say that much has been done in the last year.

Russia swiftly conducted stress tests of its nuclear power stations, on the basis of very demanding criteria. I know that similar work was done in other nations. Specific suggestions are under discussion at the  Background information International Atomic Energy Agency (IAEA) IAEA, including suggestions from Russia, on strengthening the international legal framework for nuclear security.

I am certain that this large-scale cooperation will continue and will lead to the necessary results we all need. This cooperation is important for nations like Russia, which have confirmed the strategic policy on safe development of nuclear energy, taking into account the lessons learned from Fukushima, of course. But it is also important for nations that are just launching their nuclear energy programmes and need help and support from the international community. And, of course, it matters for nations that have made alternate decisions, since giving up nuclear energy is a lengthy, complicated process requiring very stringent nuclear safety precautions and international cooperation.

Thank you very much for your attention. Let us continue our discussions.

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