Vladimir Putin will make life difficult for teapot oil refineries.
Russia should maintain its current rate of oil production at about 500 million tons a year. The conversion rate should be increased substantially from the current average of 70% for the industry as a whole. Moreover, the government has decided to prohibit the hook up of new oil refineries to oil mains if the processing depth is below 70%. "We must deal with teapot refineries once and for all," Prime Minister Vladimir Putin said at a meeting on the general plan for oil industry development in the Samara Region. This project is worth 8.6 trillion roubles.
Mr Putin started his tour of the region with the Novokuibyshev oil refinery. This facility is famous for having launched the production of jet engine fuel and oil for carrier missiles and car engines as early as 1951. Now the refinery is producing fuel for all modes of transport, including Euro-3 standard petrol for cars and Euro-3 and Euro-4 diesel fuel.
The head of Rosneft, Eduard Khudainatov, reported to Mr Putin that the average salary at the refinery that employs 3,800 people is about 28,000 roubles. Under the plan that figure will increase to 38,000 roubles by 2014. "The refinery plans to raise wages by reducing costs and increasing profitability," Khudainatov explained in the spirit of the general plan.
Yesterday, the prime minister also visited the Novokuibyshevsk Oils and Additives Plant that turns out 124 different products. It produces one third of Russia's additives. Mr Putin inspected the production of Rosneft's new line of oils.
A sign at the entrance read: "Quality control – from the well to the can." In this shop German-made robots pack 17 types of oils. The plant's Chief Industrial Engineer Alexei Tarasov told Izvestia that starting in 2013 the plant will launch the production of "Olympic" oils. Rosneft is the general sponsor of the 2014 Sochi Olympics and will include its logo on packaging.
Mr Putin asked one of the operators about the wages. "They are okay but could be higher," the operator said boldly, but did not specify a figure. The prime minister called Samara Region Governor Vladimir Artyakov who instantly reported that to his knowledge, "the average salary in this industry is around 15,000 roubles, but even higher at this plant." Apparently satisfied with this answer, Mr Putin went to attend a thematic conference. The operator was more open with Izvestia, reporting that he receives 25,000 roubles per month.
Not long ago the Russian government adopted a general plan for developing the gas sector. Opening the conference, Mr Putin said that a general plan for developing the oil industry will be approved soon as well. He noted that the fuel-and-energy complex deserves this. "The industry survived the economic crisis reasonably well," Mr Putin said. He added that the role of the fuel-and-energy complex should not be underrated. It should fully supply both residential users and the economy.
Mr Putin laid out the main objectives – to complete the construction of all oil pipelines and update the taxation system for the oil industry. At the early stages of development an oil company should have the least costs on the condition that it pays back the budget when production reaches its peak. Taxes will be lower again when production declines.
The prime minister made another important point. The Russian government has decided to prohibit connections between new oil refineries and oil mains if the processing depth is below 70%. The conversion rate must be increased.
Russia still has about 250 teapot refineries. Their oil conversion rate hardly reaches even 40%. "They are producing fuel oil or stove fuel," the prime minister said with a frown and insisted that "they should finally be dealt with."
By Yulia Shestoperova