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The meeting was attended by Chief of Staff of the Presidential Executive Office Anton Vaino, First Deputy Prime Minister Andrei Belousov, Deputy Prime Minister Alexander Novak, Presidential Aides Igor Levitin and Maxim Oreshkin, Minister of Natural Resources and Environment Alexander Kozlov, Minister of Industry and Trade Denis Manturov, Minister of Economic Development Maxim Reshetnikov, Minister of Transport Vitaly Savelyev, Minister of Finance Anton Siluanov, Minister of Energy Nikolai Shulginov, Central Bank Governor Elvira Nabiullina and representatives of the oil and gas sector.

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President of Russia Vladimir Putin: Good afternoon, colleagues.

We are continuing a series of industry-specific meetings, and today we will review the situation in the oil and gas sector. We will discuss its long-term development plans and approaches to resolving problems faced by the companies in this sector as a result of actions by the so-called unfriendly states.

As we have said many times, the most urgent problem here is the disruption of export logistics. I would like to ask you to describe specifically what action are you taking to adjust transport chains and overcome the rising logistics costs.

Furthermore, there are setbacks in payments for Russian energy exports. Banks from these unfriendly countries are delaying the transfer of funds.

I will remind you that our aim is to convert payments for energy resources into national currencies and to gradually depart from dollars and euros. In general, we intend to drastically increase the share of settlements in national currencies in our foreign trade system.

Important steps are already being taken in this area, and the key task is to prepare our currency market for this transition and enable customers to exchange any foreign currency for the required amount of Russian rubles.

As I have said, giving up unreliable, compromised currencies and jurisdictions is a strategic goal for the financial and economic security of our country, which is important for the preservation and strengthening of our foreign trade, and for the development of stable ties with predictable partners who are true to their word, value their reputation and are aware of the consequences of their decisions.

Here is what I would like to say in this connection. Russian energy companies are responsible players on the global market. Their reputation rests on decades of business activity and strict compliance with their obligations.

The Western countries’ attempts to push out Russian suppliers and to replace our energy resources with alternative supplies will inevitably affect the global economy as a whole. The consequences of this may be extremely painful, primarily for the initiators of the policy.

It is surprising that our so-called partners from the unfriendly countries admit that they cannot do without Russian energy resources, for example, gas. There is no reasonable alternative to Russian gas in Europe. Yes, it is possible to replace Russian gas, but not right know, which is clear to everyone. There are no uncontracted volumes of gas on the global market, and deliveries from other countries to Europe, primarily from the United States, will cost consumers several times more – I repeat, several times more – and will have a negative effect on people’s living standards and the competitiveness of the European economy.

Despite these obvious facts, European countries keep saying that they will abandon Russian gas supplies, which is further destabilising the market and increasing prices, primarily for their own citizens.

Moreover, they are ready to abandon the so-called green agenda and resume their reliance on energy with a so-called high carbon footprint, which until recently they wanted to shut down completely as out-of-date and dirty. Many political forces used environmental slogans in their election campaigns. Where is all of this now? It has been thrown on the scrapheap, and they are now acting quite differently.

Initially, serious specialists and analysts issued warnings, and they did so publicly, that an accelerated “green transition” cannot be made in practice without huge losses. This is just what happened in reality. Now they have a wonderful excuse to cover up their own miscalculations and blame everything on Russia. Importantly, these are miscalculations not only as regards energy but also in many other areas.

Of course, we must take into account the ambivalence and continuously changing policies of certain countries. That said we must be guided – now and for years ahead – by our own interests. In this context, our oil and gas industry is facing three tasks. First, we must ensure sustainable energy supplies for our domestic market. Moreover, in conditions when external markets are shrinking, it is important to increase supplies to Russian consumers. To encourage domestic demand, we must seek price reductions whenever possible.

Second. We must diversify exports. Let us assume that energy supplies to the West will continue going down in the foreseeable future. Therefore, it is important to consolidate the trend of the past few years: to redirect our exports gradually to the rapidly growing markets of the South and the East. To achieve this, we must determine the key infrastructure facilities and start their construction in the near future.

Third, we must develop deep processing of oil and gas. We have already made much progress in this area. We have implemented major projects and put modern plants into operation. Now we must provide additional support for the investment-stage projects in order to launch them into production as soon as possible.

And, of course, import substitution for oil and gas production equipment requires special attention. It is important for both operating deposits and for developing new fields, including those in the Arctic, as we discussed with several colleagues recently.

I will remind you that this Commission reviewed a detailed plan for import substitution for the development of the fuel and energy sector in late 2015. I suggest discussing whether the adopted decisions were effective and what problems and bottlenecks remain in this area.

Let us review this set of issues, adjust our work and set benchmarks for developing our fuel and energy sector.

I give the floor to Alexander Novak.

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Vladimir Putin: I would like to thank everyone for their proposals and ask my colleagues from the [Presidential] Executive Office to incorporate them in the final document following our meeting today.

Above all, I would like to ask the Government to take the results of today’s discussion into account when drafting the Energy Strategy of Russia. As we agreed, its planning horizon must be extended until 2050, and the strategy must be adopted by September 15.

What priorities must be considered when drafting this document?

First, it is necessary to expand the regional gas supply programme and change approaches to its implementation so that it covers as many regions, localities and households as possible. This task is quite specific: gas – either pipelined or liquefied – should reach the consumer wherever possible.

Second, regardless of external conditions, it is necessary to ensure a sufficient supply of petroleum products on the domestic market, and at affordable prices: for car owners, transport companies and businesses, including agricultural ones. All additional decisions in this regard must also be set out.

Let me add that large-scale plans on the development of petrochemistry and natural gas conversion have already been drafted and are being implemented; it is very important to focus on this. I also mean the non-market restrictions we are facing. We need to see them through, these projects, and move forward in strengthening and building up the potential of these important sectors of the economy.

Third. Energy exports. It is necessary to speed up the implementation of infrastructure projects – on railways, pipelines and ports – which will make it possible to redirect the supplies of oil and gas from the West to promising markets in the South and the East in the next few years.

At the same time, it is important to look towards the future. We need to draw up plans with oil and gas companies for expanding the export infrastructure to countries in Africa, Latin America, and the Asia-Pacific region.

Among other things, we need to plan the construction of new oil and gas pipelines from the fields in Western and Eastern Siberia – exactly what we have just discussed at the end of our meeting; to boost the capacity for oil transshipment in Arctic and Far Eastern ports – also a very important part of Northern Sea Route development; as well as to include the Power of Siberia and Sakhalin-Khabarovsk-Vladivostok gas pipelines in the Unified Gas Supply System to distribute gas to the regions in that part of the country.

I am asking the Government to draft a long-term plan for the development of oil and gas transit infrastructure; it should be ready by June 1 of this year. Please do not delay this.

I am asking the Government to include businesses and the Institute for Initiatives in Oil and Gas Technologies – we also spoke about this – in planning the transition from foreign standard and certification systems in the gas and petrochemical industry to domestic systems. This must be done without delay – before the end of this year.

Next. To stimulate import substitution in the oil and gas and petrochemical industries, we need to clearly understand our companies’ needs and interests. In this regard, I consider it expedient to work out options for consolidating demand and resources in this field, to put together a kind of umbrella package of orders for the design and manufacturing of the types of products, machinery and equipment that all our energy companies need. These are the objectives that we must direct our efforts and resources towards first.

We also spoke about bank clearing and discussed this working group Elvira Nabiullina proposed at one of our meetings. We will establish this in the near future and continue this work. I would like to thank all the participants in today's meeting and discussion. I think it was quite substantive and specific and, I am sure, will benefit the industry.

Thank you very much. All the best, everyone. Thank you.