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President of Russia Vladimir Putin: Mr Sechin, let’s talk about your company’s performance this year.

I must note that under your leadership, the company has become the biggest public oil extracting enterprise in the world. This, in and of itself, says a great deal. But there are, of course, quite a few current issues and matters concerning the company’s strategic development for the near future that require discussion. Please, go ahead.

Rosneft President and CEO Igor Sechin: This was a record year for us. Overall, we successfully integrated new assets and the company took steps to implement the best global standards in management. We have signed anti-corruption documents with all the company’s top managers. We have implemented standards for avoiding conflict of interest. We have approximately 35 such regulatory documents.

In terms of production, this year we will extract the equivalent of 240 million tonnes of oil, including 207 million in oil and gas. This is an increase of 9 million tonnes.

Vladimir Putin: Which indicator gives you the right to say Rosneft is the biggest public company? Is it the extraction of crude oil, or the total for both types?

Igor Sechin: Oil extraction. We truly are the number one public company in the world in terms of oil extraction and reserves.

Vladimir Putin: What is the current assessment of Rosneft’s reserves?

Igor Sechin: First of all, as a result of geological exploration, we replenish approximately 108% a year. In other words, we are extracting 207 million tonnes, and have increased our reserves by about 222 million as a result of geological exploration. That means that our replenishment rates are higher than our extraction volumes.

Vladimir Putin: That is good.

Igor Sechin: Over the course of the year, the company’s capitalisation has grown by about 20%.

Vladimir Putin: Do you remember how much we have in reserves?

Igor Sechin: Our current commercial reserves…

Vladimir Putin: If you do not remember the exact figure right now, it’s better not to say it. Otherwise, people will launch investigations on this issue.

Igor Sechin: I’ll give you the figure in a minute, Mr President.

Vladimir Putin: What other nations are you working in, aside from Russia?

Igor Sechin: We have 35 international projects. We are extracting in North America, South America, the Gulf of Mexico, Canada and Vietnam, and we have projects in Algeria and the North Sea.

Vladimir Putin: You have 29.6 billion barrels in reserves. Exxon Mobil is in second place with 25.2 billion.

Igor Sechin: That is correct.

Vladimir Putin: How is the work with your partners going?

Igor Sechin: Work with our partners is going well. Just a few days ago, we signed a supplementary agreement with Exxon on implementing a pilot project on hard-to-recover deposits in Russia. We are promoting similar projects with Statoil – I’m talking about increasing oil recovery ratio in Stavropol Territory.

Vladimir Putin: You have just made big strides in cooperating with China.

Igor Sechin: I wanted to thank you for your support in the talks with China. I am happy to report that the State Duma has ratified the interstate agreement on increasing oil supplies to China. This is a historical event for the global economy, because the overall contract volume contemplates supplies through to 2038; the contract is worth $270 billion. Meanwhile, its overall budgetary efficiency will be about 12 trillion rubles for the entire supplies period, including approximately 6.5 trillion in taxes and duties from our company, and 5.4 trillion as budget income resulting from equipment orders, provision of services to develop deposits, and services by transportation companies and other participants in this work. This is, of course, a huge achievement for our company, for our economy.

Vladimir Putin: And have you resolved the problems with transport? Have you reached an agreement with Transneft and other participants?

Igor Sechin: We have signed a corresponding contract with Transneft. Just today, we signed a new agreement with Transneft, with its CEO Mr Tokarev, for the provision of services next year, both for oil and for petroleum products. We have resolved all these issues.

Vladimir Putin: And are you using railways to transport anything?

Igor Sechin: We are delivering quite a lot by rail. The decisions the Government took to regulate the tariffs directly influence the effectiveness. We have asked for support in this area of work.

Vladimir Putin: Very well, thank you.

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