Official website of the President of Russia

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President Vladimir Putin: You mentioned oil prices. A number of times I set the objective of creating our own national oil exchange, an exchange that would trade oil, oil products and, later on, gas too, considering that gas trading, trading on a free gas market, is already taking place here in reality. This year we are already forecasting the gas sales volumes and approximate prices, even on the domestic market.

I know that your specialists are working on this issue and have already come up with a name for our national blend of oil – REBCO. This is an acronym of several words (REBCO: Russian Export Blend Crude Oil). What is the current state of progress in this work?

Economic Development and Trade Minister German Gref: In accordance with your instruction, the oil products exchange will begin operation by the end of this year. The according government order will be signed by the end of the year and actual trading will begin. That is as far as the oil products exchange is concerned.

But trading will take place electronically, on-line, for the time being and we need to finalise the issue of the exchange’s actual physical location. We proposed that it should be located on its former historic site in St Petersburg. For this to go ahead, we need to work together with our colleagues to prepare the site, and we hope that the exchange will begin full operation next year.

Work on setting up an oil exchange is going ahead somewhat faster than we had planned, and we estimate that we could perhaps be able to begin trading towards the end of 2007. But before trading can begin on the oil exchange, we first need to draw up a standard contract for Russian oil. Trading on the exchange will begin effectively once futures trading gets underway, that is, trading based on delayed future supplies. This will give our oil companies a new financial instrument for insuring the risks, for hedging their own risks, and it will provide an excellent instrument for operations on the domestic securities market. Under the terms of an agreement with the NYMEX New York commodities exchange, we plan to launch trading in Russian REBCO futures on NYMEX starting from October 20, this year. As this contract develops into an instrument that is really being traded, it will be transferred to the Russian exchange. All of this work is going ahead very actively. Under the agreement we have, our specialists will go to New York on October 20, together with business representatives, and the first trading will begin there. We will keep you up to date on the state of progress in this work.

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Deputy Prime Minister and Defence Minister Sergei Ivanov on an underground nuclear test conducted by North Korea:

Today, at 5.35 a.m. and 26 seconds, Moscow time, Defence Ministry technical facilities registered an underground nuclear test conducted by North Korea. We have no doubt that this was a nuclear test. The power of the explosion and the Korean nuclear weapon tested was within the range of 5–15 kilotons. We know the exact location of this underground test. The environmental situation is normal, including on Russian Federation territory, in the Primorye Region. But we are continuing our atmospheric monitoring in order to have a full and complete picture of the situation.

Vladimir Putin: I ask you to please report the relevant information to me.

Russia absolutely condemns the nuclear test carried out by North Korea. The matter is not just about North Korea itself, but about the huge blow that has been dealt to the non-proliferation of weapons of mass destruction in the world.

I hope that North Korea will return to the negotiating table and I instruct the Foreign Ministry to hold according consultations in the United Nations Security Council.