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President of Russia Dmitry Medvedev: Yury Petrovich, your ministry addresses many serious issues relating to the development of our country, the replenishment of its physical resources, and implementation of large-scale business projects. But in order to do all of this, we need to understand what we have. And, unfortunately, for quite a long time now, we have been doing practically nothing in this regard, and if we did, we did it in a haphazard way. Most of the work were done by our companies, while the government gave this issue little attention. I am referring to the issue of conducting geological research on our underground resources. I know that you are now actively conducting this work, and I would like to know your results for last year for the country overall and, of course, for East Siberia as the region with the greatest prospects, where we have great possibilities for developing our petroleum base and for implementing a number of major commercial projects. Please tell me about it.

Natural Resources Minister Yury Trutnev: Dmitry Anatolyevich, the programme of geological research on Russia’s underground resources in 2008 was fully fulfilled. We discovered 66 petroleum deposits and 20 deposits of solid underground resources. For the third year in a row, we have a high reserve replacement ratio of all the main types of underground resources: oil, gas, and gold.

Dmitry Medvedev: What exciting discoveries have been made? Please tell me, and perhaps more importantly, please tell our citizens, because they follow the development of the mineral resources base in our country very closely.

Yury Trutnev: There are petroleum deposits of over 100 million tonnes. There are no large deposits of solid underground resources discovered this year. But, once again, in the case of coal, oil, gas, and gold, we found more than we have extracted during the year. That is how things stand for the third year in a row. You have already noted that, unfortunately, during the 15 years before that, we simply consumed the resources we had found during Soviet times. For three years now, we have a high reserve replacement ratio.

In talking about works in the area of subsurface resource management, I can say that last year, we received 93 billion roubles [about 2.8 billion dollars] from one-time payments alone. This was three times more that we had expected. We added 63 billion more roubles to the budget of the Russian Federation.

We give particular significance to the work in East Siberia. West Siberia receives about 30 percent of all funds invested by the government into geologic exploration.

In the last four years, we had an increase in petroleum by over 500 million tonnes. In total, the cumulative volume of resources in А, В, С1, and С2 [categories А, В, and С1 are proven oil fields, category C2 refers to preliminarily appraised oil fields] on the territory where the East Siberia-Pacific Ocean (ESPO) oil pipeline is being built makes up 1.8 billion tonnes. Even today, this is enough to support the ESPO’s first order, but nevertheless, we continue to present companies with fairly high demands in fulfilling license provisions. They have somewhat decreased volumes this year, but we are certain that they are ready to fill the pipeline.

Dmitry Medvedev: Very well, this is important information, because this is one of our largest projects. We shall also continue to invest money in our geological research, because there really was very little attention given to this in previous years. And perhaps, despite the fact that the monetary flow of our largest companies has gone down because of the well-known problems with oil prices, and more recently, with gas, now is nevertheless the time when I think we must deal with these issues, because we need to switch our attention from large trading projects to exploring what we actually have, and on ensuring that the reserves which are running out are reproduced in accordance with the outlook that we establish for ourselves.

You said that more was found than was extracted. This is good to hear, but we must make sure that in future years, our geological exploration will give us the same positive effect; in other words, we must continue to finance all of these types of work.

Who is mainly financing these expenses now? What is the financing structure?

Yury Trutnev: Do you mean the ESPO, or…

Dmitry Medvedev: No, I mean overall, for geological exploration. How is the financing of this type of work conducted?

Yury Trutnev: The government currently provides about 19 billion roubles annually. This is budgeted through the programme for reproducing a mineral resources base up to 2020, and today we have reached a ratio of eight roubles from subsoil developers for every rouble of government funding.

Dmitry Medvedev: That is what I wanted to know about. So for every rouble provided by the government, eight roubles are provided through investments by subsoil developers. This is very important, we need to stimulate them to invest money specifically into geological research.

Yury Trutnev: That is exactly how we view this challenge.

Dmitry Medvedev: Very well.