Visits within Russia

24 september, 2009 16:36

Prime Minister Vladimir Putin chaired a conference on the development of Yamal gas deposits

Vladimir Putin's opening address:


We have met today to discuss the development programme for the Yamal Peninsula and the adjacent offshore areas, the region where we have met today, and the plans we can implement together.

I suggest discussing the practical aspects of work on the Yamal Peninsula and determine the deadlines and stages of implementing our plans. Our foreign partners can listen to what we have to say, how we do it, and what targets we have set for ourselves, and use this information to decide on their potential participation in these projects.

A large amount of exploration work has been done in this region - I am referring specifically to the Yamal Peninsula. It began back in the Soviet period and has continued into the modern history of Russia. We have invested substantial funds into training personnel and creating the necessary infrastructure, including transport channels.

By the way, today we have commissioned a new 3.9-km railway bridge, the largest in the Arctic. It was built with the use of cutting-edge technology. We have also built a 572-km railway. They are a vital infrastructure prerequisite for large-scale development of the Yamal Peninsula. They mark the beginning of its development.

We have a clear understanding that the deposits we have discovered in the peninsula can and must turn it into a new oil and gas region.

I believe that the main value of Yamal's resources is their ability to act as a stabiliser of the global natural gas markets. These are unique deposits in terms of scale, which can flexibly regulate the amounts of commodities delivered to the market depending on changes in the demand and supply.

The largest of these deposits, Bovanenkovo, has 5 trillion cubic metres of gas. Gazprom has actually started developing this deposit, where commercial production should begin in the third quarter of 2012. Overall, Yamal has approximately 12 trillion cubic metres of natural gas, and we are confident that additional exploration will greatly increase these figures.

Reserves plus resources add up to 55 trillion cubic metres of gas. This figure has been proved by exploration and calculations.

Of course, when beginning the development of Yamal we also have practical goals in mind. Gas produced here can make up for the gradual depletion of old deposits, and will also expand Russia's export possibilities, both in turns of volume and access to new markets.

We understand that we will have to work in rigorous conditions on the Yamal. But Russian gas, oil, railway and construction professionals have ample experience of working in the polar area. I am referring to field development, the construction of transport infrastructure, and other aspects.

To become truly successful, the Yamal development programme should also be comprehensive. We need to consolidate the efforts of Gazprom and its partners, other oil and gas companies, and the Government. It would be inefficient to create expensive infrastructure to gain access to only one field, even one as large and unique as Bovanenkovo.

We must also create the background for subsequent moves, for the development of other fields. We must know clearly where and what we will be doing on the Yamal in five, ten or even 20 years.

Next, we must do everything to the highest possible standards on the Yamal, above all as regards environmental protection. Nature in the Extreme North is very fragile; it would not tolerate unprofessionalism.

You know that Russia has a unique unified gas supply system, and it also plans to continue developing pipeline projects. It is logical that gas from the Yamal should be supplied to central Russia, and used for domestic purposes.

At the same time, projects that begin from scratch offer a unique chance to make a technological breakthrough in the development of the gas industry and allied sectors, above all mechanical engineering.

We must also consider including in the Yamal project the construction of a gas liquefaction plant and related infrastructure, such as a seaport and ice class ships. In this connection, I would like to spotlight one of the key elements of the Yamal development programme - the creation of a new LNG centre in Russia.

LNG production will help us reach new markets and acquire innovation technology, which is now used only infrequently in our gas sector.

As I have said before, top executives from major foreign companies are attending this meeting. Many of them have worked in Russia and cooperated with Gazprom. I repeat, we are prepared to promote partner relations, which is why we have invited you to attend this meeting in Salekhard. We would like you to feel like members of our team, like participants in this process. We would like everyone to see that Russia is working absolutely openly and transparently in this sphere. If something is unclear to you, you can get answers for any question at such meetings, both here at production sites, and in Moscow. Our main condition is that cooperation should be sustainable and lasting.

I am confident that we will find market-type and transparent ways that would certainly ensure the interests of our partners. And of course, we will not forget about state interests while doing so. I think this is logical and everyone understands it.

We proceed from the belief that when implementing joint projects on the Yamal Peninsular Russia will get access to our foreign partners' innovation technology, while Russian enterprises will get large-scale contracts for high-tech equipment, including the equipment we need.

A few words about taxes.

Seeking to encourage the development of new oil and gas regions in the past few years, we introduced severance tax holidays for producing companies. We also cut oil export duties to zero for East Siberian deposits. Ultimately, this will also benefit the budget, because new projects create jobs and increase demand in related industries.

I believe we can consider creating a favourable taxation regime for the payback period of new gas deposits, including on the Yamal Peninsula.

I said we could consider doing this, which means that the relevant departments in the Government will be issued instructions, and we will thoroughly analyse the problem in accordance with the accepted procedure. It is entirely possible that our decision on this issue will be positive.

Let us start the discussion. I give the floor to Energy Minister Sergei Shmatko.


Prime Minister Putin's closing remarks:

I would like to sum up the results of today's meeting.

Colleagues, friends, I would like to remind you once again that we have gathered in one of the world's richest regions for producing hydrocarbons, including oil, associated gas and natural gas. I am not going to repeat what volumes of resources it is possible to produce here - they are simply immense. It would be no exaggeration to say that this region is the world's oil and gas treasury. These resources are the Russian Federation's riches, and we are eager to use them primarily for the development of this country, but also to meet the growing demands of the global economy and energy industry.

We have invited our international partners whom we have known for a long time and with whom we have worked effectively for a long time. I would like to reiterate once again that this gesture is an evidence of our openness and willingness to work together.

We have gathered today to show the level of transparency of the Russian economy and government. We wanted to outline the most promising directions for development and cooperation, both for you and for us.

We have discussed various opportunities today, but the main result of today's meeting will be the beginning of the final stage of drawing up a comprehensive plan for the development of the Yamal Peninsula oil and gas deposits and infrastructure facilities. This work will be completed in the first quarter of 2010. All possible contributors have had a unique chance to look at these plans from the prospective of Russia's leading government agencies and companies, or, in essence, the Government of the Russian Federation.

I believe that the principles this project will be based on are clear and understandable to everyone. I would like to thank you all for your participation and attention. I hope our mutually beneficial cooperation will expand, including through our joint projects here on the Yamal Peninsula and in this Russian region in general.

In conclusion, I would like to apologise for the fact that we won't be having lunch today, and ask you not to regard it as a lack of hospitability. But this might possibly be justified during a global financial and economic crisis.

I hear some of our colleagues say that the main cause of the global crisis is bonuses in the banking system. It's good that the main culprits have been found: we needed to find and punish someone. Here in Russia, there is a popular joke that says that at the end of any campaign, those who have taken no part in it are rewarded while the innocent are punished. I wouldn't say that financiers bear no blame at all. However, I thought the main causes of the global financial crisis were the dollar's excessive monopoly in the global financial system, a lack of discipline, enthusiasm for derivatives, estrangement of speculative trading from the real economy, and a lack of necessary and compulsory government control. There are also other causes, but to avoid being accused of giving out excessive bonuses in the form of black caviar and Russian vodka, we decided to limit ourselves to serving water. Russian-produced water, by the way.

I wish you every success. We'll continue our cooperation in the future. Thank you for your participation.