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Vladimir Putin: Good afternoon dear colleagues!

Today we must discuss a very important issue that has many different aspects—Russia’s role in guaranteeing international energy security. I think that we all know that this is a significant issue both in internal and foreign policy.

As one of the leaders in the world energy market Russia fully understands the global problems in this sector and cares very much about the prospects for developing its own energy resources.

In any case, today it is mainly energy that ensures the growth of the world economy. It has always been that way and will remain so for a long time. This means that energy has a direct impact on the well-being of billions of the planet's inhabitants. Moreover, this key sector of the world's economy is still developing in an erratic way. And it is still susceptible to serious threats, not only economic or environmental ones. Essentially, a steady energy supply is one of the conditions for international stability as a whole. The availability of well-balanced and regular sources of energy is undoubtedly a factor in global security. And we must leave our descendants a global energy system that will spare them from conflicts and nonconstructive ways of struggling for energy supplies.

For this reason it is so important to find common approaches towards providing civilization with effective energy supplies in a long-term perspective.

In connection with this Russia supports uniting the international community's efforts and resolving problems and accomplishing tasks together.

First of all this means a reliable supply of traditional kinds of fuel for the world economy. Moreover, under conditions that are comprehensible both for states that are energy producers and for consumers.

The second thing is the diversification and safety of the energy supply, including with respect to terrorists. There are also the issues of developing nuclear power and energy efficient technologies, as well as searching for breakthrough technologies and environmentally friendly sources of energy.

We plan to present concrete initiatives and proposals for all of these problems at the G8 summit in St Petersburg. We are also ready to fully participate in their practical implementation. And our meeting today is one of the stages of preparation for teamwork with our partners.

Let me emphasize: Russia values the reputation of a solid, reliable and responsible partner in the market for energy resources, a reputation it deserves. Already now our country is the first in the world for gas exports and the second in oil and oil products. There were months in which we held first place. Russia makes an important contribution towards maintaining global and regional energy security.

Moreover, our country has certain competitive and natural advantages as well as the technical opportunities to occupy a more significant position in the energy market. We should use these advantages in the interests of the whole international community, but also keeping in mind our own national interests. Russia's well-being in the present and the future directly depends on the place we occupy in the global energy market

Aspiring to be leaders in the world energy market is very ambitious. To accomplish this it is not enough to simply increase production volumes and exports of energy resources. Russia should become the initiator and trend-setter in energy innovations, new technologies and also in looking for modern forms of resources and resource efficiency.

I am convinced that our country's fuel and energy resources and national research are ready to meet such a challenge. More than that, this major task acts as an important catalyst for modernization and significantly improves various aspects of the Russian Federation's economy.

All that has been said is realistic policy. Today this policy already has a solid basis on which to support it. The volumes of gas, oil and coal extraction are growing as is the production of electrical energy. A national fuel and energy industry ensures Russia's energy independence in a steady way. Its industrial organizations are already adapted to modern management methods. They are strengthening their positions not only in Russia but also in foreign markets.

Along with this we have had enough of unresolved questions. Therefore it is important to take stock of the situation in our fuel and energy industry and to isolate systemic problems that require urgent solutions.

I shall specify just what, in my opinion, constitute the biggest problems. The first relates to substantially improving the business climate, the quality of corporate management in the energy sector and increasing its appeal for investors. This includes competent legislative regulation and optimizing taxes in the sphere of subsoil use and extraction of mineral resources. It is necessary to involve modern up-to-date research developments in this sphere. It is necessary to think of how to make this branch modern and promising. We must do more than simply extract from the ground, which is often done in quite an uncivilized way. It is necessary to base the modern energy industry on innovation.

Here we need sensible steps that stimulate investigating and developing new deposits and increasing the exploitation efficiency of the ones that are already functioning.

Another question which must be settled is how to provide clear data on the extraction of mineral resources. It is natural that this must be done taking into account our national safety interests. All of this together should increase the appeal for investors.

The second problem. We must pay very close attention to reproducing and developing mineral and crude resources. The amount of prospecting work is still inadmissibly low. Here it is important to find a model that would combine the possibilities and interests of the state, the subsoil user and private investors.

The third problem is accelerating the modernization of the fuel and energy industry's technological base. This is something we cannot do without. It would be good to hear specific proposals on how to develop domestic energy production and rock engineering.

We must precisely determine just what our priorities are in research work on energy-related themes and concentrate the necessary resources in this field,. In particular, I am referring to the development of environmentally friendly nuclear energy, energy efficient technologies and processing crude materials.

Of course we must not lag behind other countries with respect to promising developments connected with the transition to the energy of the future, including hydrogen energy.

I also know that recently dialogue between researchers and companies on all these themes has become more active. We shall wait for concrete projects that have been agreed upon.

And finally, it is necessary to use the possibilities of international cooperation in science and technology more actively, to involve both foreign experience and investments for technological revival in Russia's fuel and energy industry.

And now dear colleagues a few words with respect to the way the national energy industry is developing abroad.

We must realize large-scale work in developing transport infrastructure to diversify the routes along which Russian energy resources are delivered. Thanks to this, we could then reduce our dependence on potential risks and, of course, we would open promising new markets for ourselves, in particular in the Asia-Pacific region.

Only yesterday we discussed one of these themes—the route to the Pacific Ocean. First of all it is a question of an oil pipeline, but gas routes are not out of the question. We also talked about this with heads of companies and within the government. The next step is to solve the problem of putting our energy resources on the market in the Asia-Pacific region. We must think about this already today and plan these steps.

In addition to the export of crude materials, it is important to consistently improve our high-tech services for constructing and modernizing energy-related installations. We should pay special attention to the following: we must not miss out on modernizing installations that were constructed abroad with Russian and Soviet participation; this constitutes a very large market.

In conclusion I would like to emphasize once again that national energy and fuel companies now have sufficient, solid opportunities to participate both in national and international projects, and to strengthen their international positions. And the state should provide them with adequate political, legal, administrative and organizational support.

I ask that all the participants of today's meeting rigorously coordinate their activities. I also expect that today's Security Council session will act as a determined and important stimulus to our joint activity.