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President of Russia Dmitry Medvedev: Mr Sechin, I’d like to discuss an issue that has recently elicited many discussions in our relations with Belarus. The issue is that of oil deliveries. The President of Belarus addressed me through a letter on this matter. I replied by outlining our suggestions, which could serve as a basis for resolving the issue of regulating these deliveries.

What are the outcomes? Today, you worked with your colleagues from Belarus. Please tell me how it went.

Deputy Prime Minister of Russia Igor Sechin: In accordance with your instructions and your message to the President of the Republic of Belarus, we have been engaged in active talks with our Belarusian partners over the last two months. These talks were overseen by yourself and the Prime Minister. Today, it is my pleasure to inform you that as a result of this work, we were able to sign documents regulating duty-free deliveries of Russian oil for Belarus’ domestic use in 2010, exactly as you had requested.

We have signed a whole package of documents including amendments to the agreement on crude oil deliveries to Belarus and the method of setting prices for oil sales, including oil transit to third parties. We have also signed the balance of crude oil in 2010. Furthermore, following your instructions and accord from the Belarusian side, my partner in these talks, First Deputy Prime Minister of Belarus Vladimir Semashko, and I also signed a joint statement regarding guarantees for uninterrupted oil transit, which is clearly important to European consumers.

In addition, we signed a protocol on talks instructing our respective departments to continue work in the fuel and energy sector; this agenda will be extended to include cooperation in gas sector and nuclear energy, as well as other matters of our energy cooperation.

Dmitry Medvedev: Very well. My suggestion, the one I formulated at a meeting of the Supreme State Council [of the Union State of Russia and the Republic of Belarus] last year, was that we should give our Belarusian partners the opportunity to work, supplying duty-free oil for domestic use, and at the same time, we must guarantee uninterrupted oil transit to third parties, which would mean resolving a number of related issues. If these matters are now resolved, then we can count this among the agreements that we’ve signed successfully. It also corresponds to the suggestion I made to President Lukashenko. Nevertheless, I would like to clarify: we haven’t sacrificed any of our own interests, have we? Do the decisions you implemented fall in line with our domestic interests?

Igor Sechin: Mr President, we followed your instructions while taking into account the interests of Russian companies participating in these talks. That is why our suggestion to supply duty-free oil for Belarus’ domestic use, which you formulated at the Supreme State Council, was included in the same set of documents as the suggestion to regulate the rates for oil transit to consumers in Western Europe. And the document that we signed today, as well as the method for setting the rates, falls in line with those goals. First and foremost, it corresponds with the interests of the Russian companies that provide oil for these deliveries.

We are now implementing a long-term formula for setting the prices, which does not allow for any unilateral increases in rates, preventing, therefore, situations when the parties to economic cooperation agreements have to pay extra money, and it fully guarantees that our interests are taken care of.

Furthermore, we can adjust these volumes, and we have agreed (as noted in the documents we signed) that in September (before October 1) we will further revise oil consumption volumes and rates policy.

Dmitry Medvedev: It is important that our interests – the interests of our companies – are not affected. At the same time, of course, we must develop friendly relations with Belarus, particularly in line with the decisions taken by our Customs Union between Russia, Belarus, and Kazakhstan. We are currently working on a whole set of new procedures. We will have a unified customs tariff, a Customs Code, and ultimately, we are working to lay the foundation for operation of the Common Economic Space.

I would like to clarify, to what extent do these kinds of agreements correspond to our strategic policy toward integrating our economies?

Igor Sechin: This agreement is specifically directed toward implementing agreements relating to the Customs Union. It levels the playing field for economic entities as these economic entities, both on the territory of the Russian Federation and that of the Republic of Belarus, will be getting crude oil for further refinement and own needs under the same conditions and at the same price. This is the approach that we will be following.

We took into account all documents signed within the framework of the Customs Union. We have been instructed to specify everything related to exports, and this will be discussed in our further talks with Belarus, as well as other partners, on the basis of an equal approach and protection of our national interests. We feel that this kind of work is a key element in our Customs Union agreements. This is precisely the basis on which we will continue developing our cooperation within the Customs Union.

Dmitry Medvedev: Very well. In that case, let’s agree to do exactly that. In the future, we will need to adhere to the following position. First and foremost, we must follow the interests of the Russian economy and Russian companies involved in such deliveries. We must also be guided by our legislation concerning these matters.

At the same time, we must also do everything we can to develop the agreements we already have with our Belarusian partners and Kazakhstan in regard to the creation and activities of the Customs Union and the subsequent creation and operation of the Common Economic Space. Based on these two priorities, I suggest that you outline a plan of your work regarding energy cooperation with Belarus for the near future.

Igor Sechin: I will do that, Mr President. We have many questions to deal with. These include the parallel work of energy systems in power industry; as you know, we work actively with our Belarusian partners in this area as well. It is very important that we ensure stable electricity supply to Kaliningrad. This will be our priority for the near future. The same will be true in regard to gas and other areas.

Dmitry Medvedev: Very well.