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President Vladimir Putin chaired a meeting on the development of the gas industry

November 20, 2001, Novy Urengoi

The future of the Russian gas complex belongs to its technological updating and streamlined financing and production, Mr Putin said at the meeting. He pointed out the necessity for a detailed programme for the development of the gas industry, which should include blueprints for a united national gas supply system.

Mr Putin highlighted an increased output of advanced goods and enhancement of exports as top national priorities. He warned against intermediaries who received a major part of profits in and outside Russia.

He said that liberalisation of the European gas market demanded new forms of government regulation of the Russian gas industry, and new patterns of price formation from beginning to end of the production chain.

In the context of current global problems, the Russian oil and gas complex could play a definitive part in strengthening world economic stability, the President said.

Shrinking mineral extraction and rising production costs worried him as old deposits were being exhausted. Mr Putin said in this connection that resource reproduction and the progress of production and transport infrastructures were an ever more topical goal.

Russian natural gas deposits exceeded 210 trillion cubic metres, of which discovered reserves made 22% – approximately a third of global reserves. Those impressive figures had made many overlook such essential economic criteria as thrift and effectiveness, the President said.

He called on the national leadership to acknowledge that Russia was squandering energy as before. The energy/output ratio of its gross domestic product exceeded that of the developed countries fourfold, on average. Thrifty use could halve national energy consumption—a fact Mr Putin described as breathtaking.

He added that it was inadmissible to raise gas, light and heating charges in winter. Energy Minister Igor Yusufov said that the nearest rise would be in the following March, at the earliest.

The President asked top Gazprom functionaries to make grants to the indigenous population of the Russian north.

He said that 15% of discovered gas deposits were still undistributed to make a considerable potential for industrial development—a goal that demanded streamlining licence laws and the patterns of government inspection of project procedures concerning deposit exploitation.

Mr Putin said that a list of his instructions to the Government would be soon drafted as the basis of decisions on the development of the gas industry to be made at a Government session in December.

Mr Putin addressed a news conference after the meeting—in particular, to comment the situation in Central Asia. A Russian border guard force of 22,500, deployed along the Tajik-Afghan frontier, guaranteed regional stability, he said.

The President stressed Russia’s active participation in the international counter-terrorist operation in Afghanistan. Russia was supplying its partners with intelligence information and had opened its air to humanitarian transits, he said.

Mr Putin said once that involving Russian troops in Afghan fighting was inadmissible. He was asked now whether his words clashed with his reassurances of Russia being ready to take part in rescuing US pilots in Tajikistan or Afghanistan. In reply, the President pointed out opportunities offered by Moscow’s “special relations” with the Northern Alliance. He added that there were also other ways to solve the problem, on which he preferred not to go into detail.

November 20, 2001, Novy Urengoi