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Following the meeting, Mr Putin witnessed the signing of a memorandum of understanding on the Baltic LNG project by Royal Dutch Shell CEO Mr van Beurden and Chairman of the Gazprom Managing Committee Alexei Miller.

The memorandum reflects both sides’ interest in expanding cooperation in the LNG sector and opens the way for a feasibility study on building an LNG plant at the Leningrad Region port of Ust-Luga. This project will enable Gazprom to diversify its LNG sales.

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Beginning of meeting with CEO of Royal Dutch Shell Ben van Beurden

President of Russia Vladimir Putin: Mr Chief Executive Officer of Shell, colleagues, I would like to welcome you all in St Petersburg.

It is a great pleasure to see you again to discuss our joint work. Shell is our longstanding and reliable partner and one of the main distributors of Russian oil, accounting, I believe, for around 20 percent of the distribution. You have made significant investments – 10 billion – into the Russian economy and you have your own production network here, and your chain of petrol stations.

I would like to hear your views today on how your business is doing in Russia, and whether you have any questions, problems, comments or requests. Let me assure you that we will take your comments very seriously and will try to respond swiftly to any issues that you raise.

Mr van Beurden, I know that you have plans to develop your business here in Russia and I will be happy to discuss these new opportunities with you.

Welcome.

Ben van Beurden: Thank you very much, Mr President, as I said, it is very nice to see you back again, this time in your home town. Every time we meet, I’m impressed by how well you know my company and what we are doing in Russia. Our commitment to Russia is indeed enduring, but at the same time, Mr President, we live in very, very tough times in our industry. And as a result of it, we have to look very hard at the opportunities that we prioritise and the opportunities that we unfortunately have to forego.

But at the same time, tough times also bring us opportunities, and last time we met, Mr President, I talked to you about the acquisition of BG Group that we were planning at the time. That is now completed, and as a result of it we are now the largest private player in liquefied natural gas. We have a market share of about 15 percent globally.

We believe in gas, Mr President. We believe in the power of the gas market growing, and in that sense, we share the same vision as my friend Mr Miller does. The future of gas, for us, and for Russia by the way, will be bright. And that’s why last year Alexei Borisovich [Miller] and myself signed a strategic cooperation agreement working on both our strengths. We put a lot of emphasis and focus on development of Sakhalin and the Russian Far East, and we have made a lot of progress on that project since last time I briefed you on it two years ago at Novo-Ogaryovo in Moscow.

But our relationship is wider and deeper and we are also looking at other opportunities, and today I would also like to discuss with you an opportunity in the Baltic, the Baltic LNG export scheme that we are both studying. So, Mr President, I am equally looking forward to covering this in some detail with you and pointing out where we are making progress, and how we can still benefit from your continued support. So, thank you very much for the opportunity to have the discussion that we are going to have.

Vladimir Putin: Mr van Beurden, you mentioned the difficult conditions in which we are operating. The main difficulty today is that the global economy and the leading countries are not coping with the growth issue, namely that growth has slowed down in all of the world’s leading economies.

This has an impact on the demand for energy resources. We are fully aware that in this situation, companies very thoroughly consider the implementation of big projects, first calculating how the market will react to volumes of energy resources coming to international markets.

We understand this and are therefore willing to adapt our domestic fiscal policy so that companies can make long-term plans based on the current situation and on medium- and long-term forecasts. In this respect, the St Petersburg International Economic Forum is an excellent platform for an open discussion of these matters.

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