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President of Russia Vladimir Putin: Good afternoon, colleagues.

I invited you to this meeting because I wanted to talk to the heads of Russia’s major oil companies, but not so much about the industry’s global issues – this is something we will touch upon later on and have a detailed discussion of the issues you have to deal with. Today we will consider prospects and trends on the global market and the needs of the national economy.

In this connection, I would like to say that overall 2015 has shown that the Russian oil industry is developing. Last year our oil companies produced a record 534 million tonnes of oil, which is 1.4 percent more than in 2014.

I would like to note the positive role of state measures to stimulate production in East Siberia, the Far East and the shelf and to develop fields with hard to extract reserves.

The environmental situation in the industry is also improving. Beginning in 2012, the share of recycled associated gas went up from 76 to 88 percent. We should note that there was a sharp increase over the past two years, from 77–78 to 88 percent, which is very good.

The supply of raw materials for refining inside the country remains high. More than half of all the oil produced in Russia goes to local refineries to produce added value. The degree of refining is also increasing.

Last year the export of Russian oil also grew. This is also another positive figure – the volume of export exceeded 241 million tonnes, which is 9 percent more than in the previous year.

We can all see how unstable the global hydrocarbon market is. It is influenced both by fundamental economic factors, primarily a noticeable slump in the world economy, and by speculative elements. All this, including political risks, affects the market.

As a result, over the past year the price of Urals crude oil dropped roughly three times. This is a very significant drop, a significant blow to companies’ revenues. Obviously, the oil companies launched their long-term investment programmes proceeding from a more favourable external market situation. Nevertheless, I would like to note that capital investment into oil production by Russian oil companies in 2015 was 7.8 percent greater than in 2014.

Our task is to retain the stability of Russia’s oil industry, to ensure its consistent development and the implementation of long-term projects. As you may know, the Energy Ministry and its Minister Alexander Novak personally, along with experts are working to resolve issues pertaining to the stabilisation of the world energy market and they regularly consult our partners, leading players on the world oil market. They are discussing measures to ensure market stability, and to balance supply and demand. As the Minister reported, they are negotiating with their partners and have practically reached agreement to the effect that this year we will not increase our production.

According to the Minister, you all agree with this proposal and some even have more radical suggestions, but not all support them. The purpose of our meeting today is for me to hear this from you. Do you really support this proposal made by the Minister? What do you think about it?

To be precise, the proposal is to freeze Russia’s oil production in 2016 at the level of January production. We are talking about an average figure for the entire 2016.

Let us discuss this proposal. I would like to hear your ideas.

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