Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

Visit to Nizhne-Bureiskaya Hydroelectric Power Plant.

Vladimir Putin visited the Nizhne-Bureiskaya Hydroelectric Power Plant and took part in a ceremony to commission three hydropower units.

Vladimir Putin visited Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin visited Nizhne-Bureiskaya Hydroelectric Power Plant.
Before the launch, Vladimir Putin was briefed on the power plant’s new possibilities. Construction of the Nizhne-Bureiskaya Hydroelectric Power Plant began in 2010. The power plant is located on the Bureya River, is part of the Bureiskiy cascade, and will produce electricity for the southern regions of the Russian Far East, including the Vostochny Space Launch Centre. When all four units come on line, the power plant will have production capacity of 320 megawatts.

Mr. Putin also spoke briefly with the power plant’s workers.

* * *

President of Russia Vladimir Putin:

I want to congratulate you all on the launch of the turbines.

In 2010, we decided to build this power plant with the idea that it would play an important part in the comprehensive efforts to protect the region from flooding, and, most importantly, would produce sufficient electricity for the region. Obviously, this is important both for industry and for households.

Vladimir Putin
Visit to Nizhne-Bureiskaya Hydroelectric Power Plant.
This is the first hydroelectric power plant of this scale built in modern Russia, the first such powerful, large, and, I would say, beautiful in terms of technical design, and up-to-date. It is a modern facility in that, as you know better than anyone does, it takes into account all the issues the hydropower sector has encountered over recent years, including those at the Sayano-Shushenskaya Hydroelectric Power Plant. Everything has been analyzed, included in the project and implemented so that the power plant will work efficiently, smoothly, and not only will not create problems, but on the contrary, will create opportunities for developing the Far East.

I congratulate you and wish you successful work.

PHOTO:
Nizhne-Bureiskaya Hydroelectric Power Plant.
Nizhne-Bureiskaya Hydroelectric Power Plant.
Hydroelectric Power Plant.
Hydroelectric Power Plant.
Vladimir Putin at Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin at Nizhne-Bureiskaya Hydroelectric Power Plant.
President Putin visited Nizhne-Bureiskaya Hydroelectric Power Plant.
President Putin visited Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin arrival at Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin arrival at Nizhne-Bureiskaya Hydroelectric Power Plant.
Russian President visited Nizhne-Bureiskaya Hydroelectric Power Plant.
Russian President visited Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin with the workers of Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin with the workers of Nizhne-Bureiskaya Hydroelectric Power Plant.

Vladimir Putin during his visit to Nizhne-Bureiskaya Hydroelectric Power Plant.
Vladimir Putin during his visit to Nizhne-Bureiskaya Hydroelectric Power Plant.

Visit to Amur Gas Processing Plant construction site.

Russian President inspected the Amur Gas Processing Plant construction site and gave the command to start pouring concrete for the foundation.

Vladimir Putin visited the construction site of the Amur Gas Processing Plant.
Vladimir Putin visited the construction site of the Amur Gas Processing Plant.

The head of state was shown scale models of the Power of Siberia gas pipeline and the Amur Gas Processing Plant. Chairman of Gazprom Management Board, Alexei Miller, told Vladimir Putin about the deadlines and construction stages for the new plant and gas pipeline.

The Amur Gas Processing Plant, now under construction 15 kilometers from the town of Svobodny on the banks of the Zeya River, will be the largest Russian gas refinery and a major facility worldwide. It will play an important part in the technological chain of future natural gas deliveries to China via the Power of Siberia pipeline. The project will promote socioeconomic and industrial development in the Amur and other Far Eastern regions.

Construction has been progressing since October 2015; site preparation is currently being completed, and road, railway and river infrastructure are also being built. In addition, preparations are underway to build a residential area for about 3,000 employees.

Vladimir Putin visiting the construction site of the Amur Gas Processing Plant.
Vladimir Putin visiting the construction site of the Amur Gas Processing Plant.
While visiting the plant, Vladimir Putin took part in a videoconference and heard reports from Gazprom Dobycha Noyabrsk Director General Igor Krutikov from the Chayandinskoye oil, gas and condensate field in Yakutia that will ship gas to the Amur plant, and by Gazprom Transgaz Tomsk Director General Anatoly Titov, from a section of the Power of Siberia gas pipeline.

* * *

President of Russia Vladimir Putin:

Good afternoon, friends.

The preparatory stage of this major effort is over and today we are launching this large project.

In the past 50 years, our country has not seen anything similar. Neither the Soviet Union nor Russia have implemented projects of this scale. The only plant of a comparable size was built during the Soviet times in Orenburg. It had a capacity of 38 billion cubic meters of gas per year. This plant’s capacity will be 42 billion, which is a breakthrough not only for the industry but also in the overall development of the Russian Far East.

Vladimir Putin visiting the construction site of the Amur Gas Processing Plant.
Visiting the construction site of the Amur Gas Processing Plant. With Gazprom Management Board Chairman Alexei Miller.
During peak periods, the construction will require several thousand people, or almost 25,000 workers, to be more precise. Once the plant is complete, it will employ 2,500 to 3,000 people, which will allow us not only to move forward in gas production but also to create conditions for building another giant plant in the country and one of the largest in the world. It will be a gas chemical plant employing tens of thousands of people during construction and then a large staff to operate the plant.

Thus, we will be equipped to not only perform our export obligations but to expand the gas network in Yakutia and begin supplying gas to Amur Region, where it is almost non-existent.

All this is an ambitious project, of which you are all participants. I want to wish you every success.

Good luck!

Gazprom CEO Alexei Miller:

Mr. President,

The Amur Gas Processing Plant is an important element of the Eastern gas program. Once opened, it will annually process 42 billion cubic meters of gas and produce 38 billion cubic meters of commercial gas.

This plant will become the largest gas processing facility in Russia and the world’s second largest in terms of gas processing volumes. In terms of helium production, this will become the largest helium production plant in the world, the No. 1 plant. It will also produce 2.5 million tons of ethane and 1.7 million tons of liquefied hydrocarbon gases.

Gazprom CEO Alexei Miller.
Gazprom CEO Alexei Miller.
There are plans to complete the plant stage by stage and to open six production lines, with each line producing seven billion cubic meters of gas. The first stage, or two production lines, will be commissioned in May 2021. The Amur Gas Processing Plant is an integral element of the production chain linking our gas production centers at the Kovyktinskoye deposit in Irkutsk Region and the Chayandinskoye oil, gas and condensate field in Yakutia via the Power of Siberia trunk gas pipeline.
Yakutia’s Chayandinskoye oil, gas and condensate field is on the line.

Gazprom Dobycha Noyabrsk Director General Igor Krutikov:

Good afternoon, Mr. President and Mr. Miller. This is Gazprom Dobycha Noyabrsk Director General Igor Krutikov reporting.

You can see a modern drilling rig behind me. These rigs are currently used to drill gas wells at the Chayandinskoye oil, gas and condensate field. Today, we are exceeding our drilling targets by over 20,000 meters. We have drilled 73 gas and eight oil wells to date. After attaining design capacity, the Chayandinskoye oil, gas and condensate field is to produce up to 25 billion cubic meters of gas and at least 1.5 million tons of oil annually.

Construction site of the Amur Gas Processing Plant.
Construction site of the Amur Gas Processing Plant.
Currently, vigorous efforts to build production facilities are underway, including oil treatment and comprehensive gas treatment units. Today, the Chayandinskoye oil, gas and condensate field employs 5,000 experts and uses over 1,000 pieces of equipment, operating 24 hours a day.

I would like to assure you that the current pace of work will help to successfully implement the state Eastern gas program  to ensure the timely delivery of products to consumers.

Thank you for your attention.

Alexei Miller:

We have a linkup now with a construction section of the Power of Siberia trunk gas pipeline.

General Director of Gazprom Transgaz Tomsk Anatoly Titov:

Good afternoon Mr. President, Mr. Miller. This is General Director of Gazprom Transgaz Tomsk Anatoly Titov reporting.

Our company was appointed customer for this construction, and operator of the Power of Siberia trunk gas pipeline once it comes on line. Today, 1,640 km of pipe have been delivered to the pipeline route. This is 80 percent of the total. All of the pipes are made by Russian companies. We have 8,500 people and around 4,000 pieces of equipment working on the construction. Welding has been completed for 1,150 km today, which is 53 percent of the total length. The welding is done using modern automatic welding equipment. All work meets environmental standards. We are up to the task ahead, to supply gas to the Amur Gas Processing Plant and to China in December 2019.

This concludes my report.

Alexei Miller:

Mr. President,

The Chayandinskoye and Kovytkinskoye fields, the Amur Gas Processing Plant and Power of Siberia are all integral parts of the Eastern Gas Program, which will create an integrated gas production, transportation, processing and supply system in Eastern Siberia and the Russian Far East.

The Power of Siberia trunk gas pipeline, which will be commissioned on December 20, 2019, is the backbone of this system. What is important is that the Amur Gas Processing Plant is playing an important part in developing our international cooperation. Construction subcontractors for the plant include our partners from the People’s Republic of China. The heads of these companies are present at the ceremony today and I would like to welcome them.

Construction site of the Amur Gas Processing Plant.
Construction site of the Amur Gas Processing Plant.
The Amur Gas Processing Plant, once it comes on line, will give a powerful boost to socioeconomic development in the Far East and Eastern Siberia and will ensure the implementation of the program to connect people to the gas network in these regions. I wish all of the construction workers and company staff success with this project.

A large part of the preliminary work for the main facility’s construction has already been completed. Mr. President, I would like to ask you to give the signal to start laying cement for the Amur Gas Processing Plant’s first foundation.

Vladimir Putin:

Go ahead!

Alexei Miller:

The work to lay the Amur Gas Processing Plant’s first foundation has begun.

Vladimir Putin:

Congratulations! I wish you success and all the very best.

PHOTO:
Arrival at the construction site of the Amur Gas Processing Plant. With Energy Minister Alexander Novak.
Arrival at the construction site of the Amur Gas Processing Plant. With Energy Minister Alexander Novak.

Meeting with Gazprom CEO Alexei Miller.

Vladimir Putin had a working meeting with Chairman of Gazprom Management Board Alexei Miller. The Gazprom CEO briefed the President on the situation with provision of gas supply to the Russian regions and the company’s current operations.

Vladimir Putin, Alexei Miller.
Meeting with Chairman of Gazprom Management Board Alexei Miller.
President of Russia Vladimir Putin:

Mr. Miller, let’s discuss the company’s performance so far this year.

The second issue is connected to Direct Line: There are a lot of problems related to provision of gas supply. These are traditional problems that people raise in the course of Direct Line, and we do not just discuss these things. I know that you have proposed specific solutions together with the regions: Gazprom cannot deal with this on its own, without the regions. Nevertheless, I would like to revisit the matter.

Chairman of Gazprom Management Board Alexei Miller:

Mr. President, in the first six months of 2017 Gazprom increased production by 36.2 billion cubic meters, year on year, or by 18.4 percent. This is related to growing gas consumption on the domestic market and it is noteworthy. Household gas consumption was up 4.6 percent; consumption in the power engineering sector, 9.5 percent; the agro-chemistry, 20.6 percent; metallurgy, 28.2 percent; total average growth, 11.2 billion or 9.7 percent. This clearly points to economic growth in these sectors.

Growing gas consumption in the household sector shows that issues related to provision of gas supply are, without a doubt, very important and significant and Gazprom continues implementing the program to provide gas supply that we launched in keeping with your instruction in mid-2005.

Vladimir Putin and Gazprom CEO Alexei Miller in the Kremlin.
Vladimir Putin and Gazprom CEO Alexei Miller in the Kremlin.
This year, we are implementing the program in 68 regions; 25.7 billion rubles have been disbursed. A total of 3,700 km of gas pipelines are under construction as part of this program. This year, 1,700 km will be put into operation in 31 regions; 160 gas boilers will be built and 75,800 flats and households will be provided with gas services; pipeline gas will be provided to over 200 localities.

There are problems with some regions. We have 19 regions that regularly fail to fulfil the commitments they assumed under the scheduled synchronization plans that we sign with them every year.

Vladimir Putin:

They do not get it to the end consumer?

Alexei Miller:

Right, after all, Gazprom is responsible for providing gas to the edge of a settlement. As for the distribution system in the settlement or within the building, or preparations for users to be connected, this is certainly the responsibility of the regions.

Based on the results of the past six months, Gazprom will have to consider how to redistribute funds in those regions that did not fulfil their commitments in the first half of the year and allocate additional funds to those regions that complied with their obligations.

On average, by the beginning of 2017 provision of gas supply reached 67.2 percent nationwide, 70.9 percent in cities and urban settlements and 57.1 percent in rural areas.

Chairman of Gazprom Management Board Alexei Miller.
Chairman of Gazprom Management Board Alexei Miller.
The amount of investment we allocate is bringing less and less gain every year because gas has to be supplied to more remote areas. However, I would like to point out that in 2017 we allocated considerable funds to regions like the Primorye Territory, considering the national policy on accelerated development of the Far East. Today the Primorye Territory is the biggest recipient of investment under the gas infrastructure development program.

I would also like to note that we have established a good working dialogue with those regions that are led by new governors, acting governors. I would like to mention the Yaroslavl Region. We had a working meeting with the governor in Yaroslavl and mapped out very serious plans on provision of gas supply in the region.

Naturally, Eastern Siberia is now playing a tangible role in our program. I would also like to mention the Novosibirsk Region. We are allocating substantial funds to them. And I would also like to mention the Northwest – Karelia.

Probably, I should also mention a number of regions that regularly fail to comply with their commitments for various reasons. This applies to Dagestan and, regrettably, the Volgograd Region. These are the regions that chronically lag behind the obligations they assumed.

Gazprom is funding the program in a consistent manner. In the first half of the year we earmarked exactly half of the funds that were provided for the program. We plan to start service at all facilities by the beginning of the 2017–2018 autumn-winter season.

<…>

Vladimir Putin launched the alignment of the Turkish Stream.

Vladimir Putin took part in a symbolic launch of the alignment of the shallow and deep-water sections of the Turkish Stream gas pipeline aboard the Pioneering Spirit heavy lift construction vessel.

Vladimir Putin and Alexei Miller launching the alignment of the shallow and deep-water sections of the Turkish Stream gas pipeline
Vladimir Putin and Alexei Miller launching the alignment of the shallow and deep-water sections of the Turkish Stream gas pipeline

The President also took a tour of the ship and held a working meeting with Gazprom CEO Alexei Miller.

The underwater gas pipeline will ensure safe and stable deliveries of natural gas to the Turkish market and to customers in southern and southeastern Europe. The annual planned capacity is 31.5 billion cubic meters.


Pioneering Spirit, one of the world’s largest construction vessels, is capable of installing pipelines on the seabed. The ship can lay up to five kilometers of pipes per day at the depth of up to two kilometers.

PHOTO:
Arrival at Pioneering Spirit, one of the world’s largest construction vessels, capable of installing up to five kilometers of pipes per day at the depth of up to two kilometers.
Arrival at Pioneering Spirit, one of the world’s largest construction vessels, capable of installing up to five kilometers of pipes per day at the depth of up to two kilometers.

Vladimir Putin aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.
Vladimir Putin aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.

Russian President aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.
Russian President aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.

Russian President Vladimir Putin and Gazprom CEO Alexei Miller.
Russian President Vladimir Putin and Gazprom CEO Alexei Miller.

President Putin aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.
President Putin aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.

The President of the Russian Federation aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.
The President of the Russian Federation aboard the Pioneering Spirit construction vessel. With Gazprom CEO Alexei Miller.

Meeting with Royal Dutch Shell CEO Ben van Beurden.

Vladimir Putin met with CEO of Royal Dutch Shell Ben van Beurden to discuss, in particular, the implementation of the Nord Stream 2 project.

Russian President Vladimir Putin.
Russian President Vladimir Putin.

Royal Dutch Shell is one of the world leaders in the energy and petrochemicals sectors, operating in more than 70 countries, and has a close partnership with Russia.

* * *

Beginning of the meeting with CEO of Royal Dutch Shell Ben van Beurden.


President of Russia Vladimir Putin:

Mr. van Beurden, colleagues,

Allow me to cordially welcome you to Moscow and congratulate you on the 125th anniversary of your company's operations in Russia.

The company started out with kerosene exports from the Russian Empire, namely Baku, to third countries. Now, the company is widely represented in Russia, and we have very good prospects and big plans. I will be pleased to discuss them with you today.

CEO of Royal Dutch Shell Ben van Beurden:

Thank you very much, Mr. President. As always, it is a pleasure to meet, and it is an honor to be back in Moscow again. You are right, 2017 is a very special year for us because it is, as you said, 125 years since we started working in and with Russia.

You have been well briefed, Mr. President. It started, indeed, with the first ever bulk kerosene transport from Baku to Singapore in the Shell Murex. It was a huge success, and one could argue it was the beginning of the modern oil transportation era, and definitely the foundation of the success of our company.
But this success would not have been possible without the strong partnership from our Russian friends in those days. And that partnership, of course, has strengthened and flourished for many years since then. I am very happy and very proud of what we have done in Russia, the contribution that we have made in establishing new energy systems like LNG, and contributing to new field development.
So this time I come to Moscow specially to say “spasibo” to you, Mr. President, to Russia, for the trust, for the confidence, and for the welcome that we have enjoyed for 125 years.

But I also come to say that I am optimistic about our business and the future of our business in Russia. There have been some very important developments. Recently we agreed and executed the loan agreements on Nordstream-2. And I believe Nordstream-2 is a very good project, a project that will enhance energy supply security in Europe, and a project that both Europe and Russia will benefit from.

But also, in Moscow today, I detect another sense of optimism – optimism about the match that is going to be played tonight. It is a very important match, Mr. President, and I hope that, despite your very busy schedule, you will find some time to enjoy aspects of it.

Vladimir Putin: I am not sure about football, but with regard to our plans, including the Nord Stream-2 project, which you mentioned, it has every chance to be successful.

I always emphasize the fact that this is a purely commercial project and, of course, it is tied to the prospective increase in gas consumption in Europe to 510 billion cubic meters per year at a time when domestic production in European countries, including northern Europe, will be declining.

I think all we need to do is to calmly explain to all our partners, all stakeholder countries and legal entities that this project is not directed against anyone, but, on the contrary, is designed to promote the development of energy markets.

Of course, energy can be obtained from other sources. It is all about competitiveness, logistics and the cost of these components. I believe that we need to maintain a patient and friendly dialogue with all our partners.

<…>


PHOTO:
Meeting with Royal Dutch Shell CEO Ben van Beurden.
Meeting with Royal Dutch Shell CEO Ben van Beurden.
Vladimir Putin during a meeting with CEO of Royal Dutch Shell Ben van Beurden.
Vladimir Putin during a meeting with CEO of Royal Dutch Shell Ben van Beurden.
CEO of Royal Dutch Shell Ben van Beurden (center).
CEO of Royal Dutch Shell Ben van Beurden (center).

Putin met with Rosneft CEO Igor Sechin.

Vladimir Putin held a working meeting with Igor Sechin, Rosneft CEO, Chairman of the Management Board and Deputy Chairman of the Board of Directors.

Russian President Vladimir Putin and Rosneft CEO Igor Sechin.
Russian President Vladimir Putin and Rosneft CEO Igor Sechin.

President of Russia Vladimir Putin:

Mr. Sechin, there is no need to describe Rosneft, since it has truly become one of the world’s oil and gas industry leaders. A lot has been done lately to consolidate the company. A portion of the company's shares went private, you now have strategic investors who have assumed certain commitments to develop the company and organize the sale of oil and petroleum products. In a word, the company is expanding.

I am aware that a general shareholders’ meeting will be held in a few days, so I would like to ask you to discuss a number of issues related to high technology, digital technology, the latest production techniques and, most importantly, changes on the international market.

You are among the participants in the process of coordinating the positions between our largest companies, and the Government, and, in turn, this is how we formulate our position with regard to our partners on the international oil market.

As a matter of fact, Rosneft participates in developing these decisions. You are aware of what is happening on the international market, so a new corporate strategy should be developed based on your knowledge. Of course, I would like to ask you to get back to the fiscal issues, namely, to paying 50 percent of the dividends based on net revenue.

These and other issues will need to be discussed with your colleagues during the upcoming meeting.

Rosneft CEO, Chairman of the Management Board and Deputy Chairman of the Board of Directors Igor Sechin:

Mr President,

We have carefully studied the instructions you issued at the St Petersburg [International Economic] Forum. Of course, we will use the upcoming general shareholders’ meeting and the board of directors meeting, which will follow the general meeting, to raise all the issues related to our response to the volatility on the international markets, strengthening the company's position in light of improving its efficiency and reducing costs, using advanced technology, such as digital material management technologies, supply chain management, and overhauling accounting systems across all areas of business pursued by our company.

We signed a relevant technology transfer agreement with General Electric several days ago and hope it will have a major impact. We will have to make some adjustments in corporate strategy.
We will use everything that is aimed at boosting efficiency and adopting cutting-edge technology in oil production and processing to approach the premium customer markets such as petro chemistry.
We will draft instructions and a new corporate strategy to deal with the challenges we are facing.

Vladimir Putin:

Please tell us about the new deposit.

Igor Sechin:

Mr. President, we would like to thank you. You gave us the command to start working at the Khatanga licensed site. Here are the first results of this work. (Core sample is shown.) Please be careful – the core is oil-saturated. It is filled with oil and even has oil staining. This core is unique for our deposits. We made a tentative analysis and its high hydrocarbon content and productive bed thickness allow us to report to you, Mr. President, that we are about to discover a very rich deposit.

We brought this core from a depth of 2,300 meters. Our task is to continue research to a depth of 5,000 meters in order to explore Lower Permian beds. Today our geologists are saying these will be unique deposits. According to preliminary technical studies in the Laptev Sea area, they may contain up to 9.5 billion tones of geological resources. This requires a serious effort. We hope you will follow up on our work and we will report to you on new results as they come along.

Vladimir Putin:

All right.

<…>

Link:  http://en.kremlin.ru/events/president/news/54830

PHOTO:
Russian President meeting with Rosneft CEO Igor Sechin.
Russian President meeting with Rosneft CEO Igor Sechin.

President's meeting with Russian Government members.

Vladimir Putin met with Government members to discuss possibilities for further developing treasury monitoring of budget spending, the situation with co-funded housing development, and a number of other current issues.

President of Russia Vladimir Putin:

Good afternoon colleagues.

Today, we will discuss the results of work and further development for treasury monitoring of budget spending. Before we start though, I would like to hear a few words on recent decisions, particularly on an issue that is very sensitive and painful for many people – co-funded housing construction projects.

We know there have been many problems, as well as numerous and justified complaints that the state authorities did not ensure sufficient oversight in this sector. But new decisions have been taken, and since the start of 2017, the rules have changed considerably for developers attracting household funds to finance construction.

I ask Mr. Men to give us some more details on this matter.

You have the floor.

Minister of Construction, Housing and Utilities Mikhail Men:

Mr. President, colleagues,

Russian Government took a number of measures to act on the instruction you issued following the State Council meeting examining strategy in the construction sector. A number of changes were made to the law on participation in co-funded housing construction and came into force on January 1, 2017. These amendments aim to better protect people taking part in co-financing of apartment block construction projects.

One of the key changes is to set requirements regarding developers’ financial resources, namely, their charter capital, depending on the housing construction project’s area. The supervisory bodies in Russia's regions have gained new powers; they examine the situation, and without their report concluding that a developer meets the new law’s requirements, the developer cannot register a shared construction participation agreement and therefore cannot start raising money from the public.

The new law also makes important changes increasing the information transparency of developers working with citizens’ money. The law sets mandatory requirements regarding the content and accuracy of information disclosed. The law also regulates mechanisms for banking project financing for construction projects, involving the opening of accounts and escrow accounts for holding the funds of those taking part in co-funded construction projects.

Following your instructions after the State Council meeting, amendments were introduced and bylaws were passed to establish and begin the operation of a state compensation fund. Developers will make mandatory contributions to this fund of one percent of the shared construction participation agreement’s sum. If a developer goes bankrupt, money from the fund will be used to cover the problem building’s completion, or to repay the losses of those taking part in the project.

Russian Government has drafted additional amendments to a number of laws, which will be submitted soon to the State Duma, in order to ensure this state fund’s effective operation and establish a common mechanism for protecting shared construction participants’ rights exclusively through this compensation fund. I hope that our Duma colleagues will give these amendments their priority attention. We ask for your support on this.

The fund began operation on January 1.

Thank you.

Vladimir Putin:

In this context, there is a second question.

Housing mortgage loans have increased by around 30 percent compared to 2015–16. Overall, more than 6 million citizens have made use of housing mortgage loans to improve their housing conditions over 2005–2016. What measures do you plan to develop this process further?

First Deputy Prime Minister Igor Shuvalov:

Russian Government is working on the mortgage issue, keeping in mind the target figures set by the Presidential Executive Order of May 7, 2012. The target was to have at least 815,000 new mortgage loans a year. We had a good year in 2014, with more than a million new mortgage loans. Then we went through a difficult year in 2015. The Government briefed you and got your support for including in the anti-crisis program measures to subsidize interest rates of mortgage loans to buy newly constructed housing.

This program was quite effective and some people even consider it one of the anti-crisis plan’s most effective measures. As regards our commitments, we think for now that total spending on this measure will not come to more than 17 billion rubles, with a total of 25 million square meters of new housing purchased.


Considering the low inflation we had in 2016, and seeing that the financial market has stabilized significantly now, the Government has decided not to continue this program, because the commercial banks are already offering mortgage loans at 12 percent or less interest. Our goal under the anti-crisis plan was precisely to give borrowers a rate of not more than 12 percent. At the time when we took the decision on subsidized rates, banks were offering loans at 20 percent interest. There was practically no hope for such a product on the market.

The measure has fulfilled its task and we have already stopped it. We hope that over 2017, along with the drop in the key interest rate, Sberbank, VTB Bank and other commercial banks will also lower their rates and mortgages will become more affordable for the public.

As you noted, the mortgage loan portfolio grew in 2016, and we have reached the target figure – the statistics agency confirms a figure of 862,000 mortgage loans in 2016. We hope that the figure will pass the 1-million mark in 2017.

(Mr. Shuvalov went on to brief the meeting on the work of the Agency for Housing Mortgage Lending, its cooperation with the Central Bank and commercial banks, and on measures to get housing onto the market).

Vladimir Putin:

We all know that today’s oil price is linked to plans to reduce oil production. Mr. Novak, what is the situation with this production reduction plan?

Energy Minister Alexander Novak:

Mr. President, colleagues,

On December 10, 24 countries, the leading oil producers, reached an agreement on stabilizing the situation on the oil market and the need to start reducing oil production as from January 1 by a total of around 1.8 million barrels a day. The OPEC countries (13 countries) account for 1.2 million barrels a day of this reduction, and the 11 non-OPEC countries for 558,000 barrels a day. Russia will take voluntary part in this agreement and will potentially reduce production by up to 300,000 barrels a day.

The agreement will be in effect over the first half of the year. We agreed to establish a monitoring committee at ministerial level. The committee met for the first time on January 22 in Vienna to discuss two issues: first, the mechanism for monitoring implementation of the agreement, and second, the situation with the agreement’s implementation in January.

Regarding monitoring, we agreed that five countries’ ministers would sit on the committee. They include two non-OPEC countries – Russia and Oman – and three OPEC countries – Kuwait, Algeria, and Venezuela.
We agreed to set up a technical committee for the monitoring process. It will meet monthly at the OPEC secretariat and collect information on production in the countries party to the agreement and pass on this information to all participant countries. The ministerial level monitoring committee will meet twice a month to review the results.

Another two meetings will take place before the agreement ends. The production information’s source is data from the main analytical agencies, Platts, Argus, CERA and the International Energy Agency. At the meeting, we noted that although we have yet to receive statistics for January, we saw that all parties were serious about implementing the agreement and most had already begun. Preliminary data shows that production dropped by around 1.4 million barrels a day in January, and some countries had reduced production by more than planned and were ahead of the schedule.

As of the end of January, Russian production had fallen by 117,000 barrels per day, which is also more than double the amount initially planned by our companies. Our companies participate in this on a voluntary basis.

We have noted that the effectiveness of the agreements and decisions is already visible, since the price has stabilized at $55 per barrel. According to leading analytical agencies, the price is much closer to a fair price, about 10 to 15 barrels higher than it would have been without the deal.

Vladimir Putin:

10 to 15 dollars?

Alexander Novak:

Yes, 10 to 15 dollars per barrel.

We also see a decrease in the speculative pressure on prices, because at the beginning of the year, when prices fell hard, there was an all-time high number of traders shorting oil. Now, the situation has stabilized.

We also see a decrease in price volatility. The statistics for January show that price fluctuated within $5 relative to the median value of $55. We can now talk about the gradual recovery of the investment appeal of the industry. This year, for the first time in the last three years, all market participants expect an increase in investments in the industry, which will help avoid a collapse in production in the future.

In general, I must say that the Vienna meeting showed that all countries intend to properly execute the agreement, as it is in the interests of both the producers and the consumers. We believe that rebalancing the market, subject to full compliance with the agreements in the first half of the year, will allow us to reach the level of leftovers equal to the average over the last five years for oil by mid-2017. This is the outcome, the goal that was set in order to balance and stabilize the oil market.

Vladimir Putin:

This volume, the conventional excess amount of oil on the market, when do you think it will run out – by around mid-2017 or so?
Alexander Novak:

By the middle of 2017. It’s 300 million barrels, which is above the multi-year average of stored oil leftovers.

Vladimir Putin:

Are our companies facing any problems in that regard?

Alexander Novak:

Our companies are operating under the agreement, and do so on a voluntary basis, as it really is beneficial both for the companies and the budget in general. About 70 percent of additional revenue that we have today go to the budget.

Vladimir Putin:

Good. Thank you.

The first 2018 FIFA World Cup fan passport was issued on February 1. How is this work organized, and where will it go from here?

Mr. Nikiforov, please go ahead.

Minister of Communications and Mass Media Nikolai Nikiforov:

Mr. President,

Indeed, we issued the first fan passport in Moscow today. Admission to stadiums for the 2017 FIFA Confederations Cup and the 2018 World Cup will be granted upon presentation of two documents: a fan passport and a ticket. Registration on www.fan-id.ru is required to obtain a fan passport. This can be done by both Russian and foreign fans.

Moreover, once registered, that person can enjoy visa-free entry to Russia under our government guarantee, which we issued when organizing the World Cup. This electronic document, plus a mark in an appropriate database.

Our key goal is to make visiting the event as safe, convenient and comfortable as possible. This eliminates the need to do additional checks when fans enter the stadium. Therefore, we recommend that everyone who has already bought a ticket or plans to attend matches register in advance.

Fan passport centers are open and already issuing passports in four Confederations Cup host cities, namely, Moscow, St Petersburg, Kazan and Sochi. We are talking about thousands of applications. We think the closer we get to the summer, the more applications we will process.

It’s Russian technology. We used something similar at the Olympic Games in Sochi, and we plan to use it again in 2018. Probably, we will use this standard procedure during the 2019 Student Games as well.

Overall, we believe that it should become a standard solution to ensure safety, convenience and comfort. I believe Mr. Mutko is better positioned to talk about the place of the fan passport in the overall organization concept.

Vladimir Putin:

Mr. Mutko, please go ahead.

Deputy Prime Minister Vitaly Mutko:

Mr. President, Mr. Nikiforov has already mentioned that this is an important step in our preparations for the World Cup and the Confederations Cup. I just wanted to add that this component of the security concept approved by you will, of course, allow us to bolster security measures and create a more comfortable environment.

This will also provide several additional services for our foreign guests and Russian fans, including visa-free entry, free mass transit rides in the World Cup host cities for fan passport holders, and the opportunity to see matches in other cities upon presentation of a ticket.

So we hope that we now have all the necessary capabilities in terms of information. Regardless of where they live, a fan can register and receive confirmation, and Russian Post will deliver a passport to his home. As such, we believe that this work is already underway.

We think about 700,000 tickets will be sold for the Confederations Cup. More than 100,000 applications have been filed already. About 10,000 people are in the process of obtaining their fan passports. It’s very convenient. We will think through all the ins and outs. If needed, such centers will be built near the stadiums in case someone loses or forgets their stuff. We will take care of everything.

Mr. President, we have little time left before the Confederations Cup. The overall preparations are going at a good pace, and the first match in St Petersburg will be held on June 17, which will mark the opening of the Confederations Cup.

Vladimir Putin:

Who will be playing?

Vitaly Mutko:

Russia and New Zealand.

Vladimir Putin:

Good.

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Link: http://en.kremlin.ru/events/president/news/53804

PHOTO:


Vladimir Putin in Kremlin.
Vladimir Putin at meeting with Government members in Kremlin.
Vladimir Putin, Russian Government.
President's meeting with Government members in Kremlin.
Arkady Dvorkovich, Vitaly Mutko and Alexander Khloponin.
Left to right: Deputy Prime Ministers Arkady Dvorkovich, Vitaly Mutko and Alexander Khloponin.
Denis Manturov, Sergei Prikhodko.
Industry and Trade Minister Denis Manturov (left) and Deputy Prime Minister – Chief of the Government Staff Sergei Prikhodko before a meeting with Government members.
Andrei Belousov, Igor Shuvalov.
Aide to the President Andrei Belousov and First Deputy Prime Minister Igor Shuvalov before a meeting with Government members.

Putin had a meeting with business representatives.

Vladimir Putin met with Qatar Investment Authority CEO Abdullah bin Mohammed bin Saud Al Thani, Glencore International AG CEO Ivan Glasenberg and Intesa Sanpaolo SpA CEO Carlo Messina. The meeting was attended by Rosneft CEO and Chairman of the Management Board Igor Sechin.


President of Russia Vladimir Putin:

Friends, colleagues, allow me to cordially welcome you to Moscow.

I would like to congratulate you on the closure of the deal to acquire a 19.5 percent stake in our leading oil company Rosneft. I would like to thank you for your trust, for your decision. And I would like to express my confidence that your business in Russia will develop and that it will develop successfully. After the deal was closed, Rosneft’s market value increased 18 percent, so you have already made a profit.

I know that you plan to expand cooperation with the company, including in Russia, and we will honor all these agreements in good faith because they are also in the interest of all participants in this process.

Our Qatari friends will engage in hydrocarbon production on Russian territory. Glencore will have a long-term contract. I know that you are already working on a long-term contract on deliveries of our oil to international markets. In this sense, Rosneft is interested in such long-term cooperation in both these dimensions.

I hope very much that Intesa will also expand its operations on the Russian market. I believe you also have an office.

Intesa Sanpaolo SpA CEO Carlo Messina:

Yes.

Vladimir Putin:

Is it an office or a subsidiary that is already up and running?

Carlo Messina:

It’s a bank. It’s a fully licensed bank, and we want to expand our presence, because we want to increase our presence in the country.

Vladimir Putin:
As far as I know, today is exactly 10 years since Intesa teamed up with your partners. So I congratulate you on this date.
Carlo Messina: Thank you very much.

Vladimir Putin: How do you evaluate the deal and its development prospects?

Glencore international AG CEO Ivan Glasenberg:

The deal is very important to us as Glencore, as you know – we’ve had a long relationship with Rosneft and we’ve been taking oil and oil products from Rosneft and trading and marketing around the world. And I think this new deal gives us further tonnages. And we’ve indeed been talking to Rosneft about how we can swap tonnages, we can deal with different countries around the world – where we have our strength and they have their strength – into India, into other parts of Asia, into China, where we can utilize our tonnages and their tonnages. So there are a lot of opportunities for us to work together around this transaction, for the benefit of both companies.

Vladimir Putin: Previously, you were involved with coal?

Ivan Glasenberg:
Yeah, we’ve been dealing in Russia for many years. We started getting very active since 1991–1992. We deal a lot with the various coal companies. We export coal from Russia. We’ve been dealing with that for many years. So we deal with all of them. We deal a lot in aluminum. We have investment, as you know, with Rusal. We have an off-take agreement with Rusal, so we take a lot of aluminum. We deal in copper-zinc, so we have an active relationship in getting commodities out of Russia.

Vladimir Putin: I hope that our Qatari friends are also satisfied with the work at this stage.

Qatar Investment Authority CEO H.E. Sheikh Abdullah bin Mohammed bin Saud Al Thani:

First of all, I would like to thank you for the meeting. I would like to convey the regards of His Highness the Emir to Mr. President.
Last year, we started to invest in Russia. And after the visit of His Highness, in January, we stepped up our investment, for instance with RDIF, with VTB Bank, and St Petersburg Airport, and now with Rosneft. And we will continue working together for more relations and more investment together.
Vladimir Putin: I hope that your work with the Russian Direct Investment Fund will also expand in other areas.

Sheikh Abdullah bin Mohammed bin Saud Al Thani:
We did almost over 500 million in almost a year, and last night we closed another contract that we will continue for another two billion for the coming investment together.

Vladimir Putin: Convey my very best wishes to His Highness the Emir of Qatar.

I would like once again to congratulate you on this deal. It is the world’s largest deal in the oil and gas sector last year.
Sheikh Abdullah bin Mohammed bin Saud Al Thani: Thank you.


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Link: http://en.kremlin.ru/events/president/news/53774


VIDEO:


PHOTO:

Vladimir Putin. business representatives
Vladimir Putin. Meeting with business representatives.
Vladimir Putin, Igor Sechin, business representatives.
President's meeting with business representatives.

Vladimir Putin meeting with business
Vladimir Putin and Igor Sechin meeting with business representatives.

Vladimir Putin, Igor Sechin, business representatives
Meeting with business representatives. With Rosneft CEO and Chairman of the Management Board Igor Sechin (left).

Vladimir Putin
Vladimir Putin at the meeting with business representatives.
qatar investement, glencore, intesa CEO
Qatar Investment Authority CEO H.E. Sheikh Abdullah bin Mohammed bin Saud Al Thani, Glencore International AG CEO Ivan Glasenberg, Intesa Sanpaolo SpA CEO Carlo Messina (left to right) at a meeting with business representatives.

Vladimir Putin. Meeting with Rosneft Board Chairman Igor Sechin.

Mr. Sechin briefed President Putin on Rosneft’s performance in 2016.

President of Russia Vladimir Putin:

Mr. Sechin, aside from the deal we all know about, how did the year go? What is the overall situation?

Board Chairman of Rosneft Igor Sechin:

Mr. President, 2016 saw particular volatility on the hydrocarbon markets. We had to work under pressure, but the year set a record in terms of production for Rosneft. Production increased by around 4 percent with total production for the year in liquid equivalent coming to 265 million tonnes. This is a record figure for the company. Of this amount, oil production accounted for 210 million tonnes, and we produced 67 billion cubic metres of gas.

Total investment in 2016 came to 750 billion rubles. Investment went mainly into increasing production drilling in Western Siberia and for new projects. This meant that the Suzunskoye field, the Vostochno-Messoyakhskoye field, which we developed together with Gazpromneft, and growth at Yuganskneftegaz became the main factors contributing to the production growth we achieved this year.

The volume of production drilling increased by 35 percent (to 9.3 million metres) in 2016, and we brought 2,700 new wells into operation. This was also a record figure, up 43 percent on the 2015 result. This was possible because the company created its own oil drilling service, and we increased the total number of well rigs by 20 percent in 2016. We discovered 13 new fields over the course of the year, and 103 new deposits with total reserves of up to 159 million tonnes in oil equivalent. We expect the reserves increment to reach 290 million tonnes. The Russian refineries affiliated to the company processed 87.5 million tonnes, and we processed more than 12 million tonnes at refineries abroad, also affiliated to Rosneft. Total processing thus came to around 100 million tonnes.

In 2017, we intend to bring processing at our facilities up to 120 million tonnes. The share of light petroleum products has grown to 56 percent, and the refinery yield has increased to 71.2 percent, compared to 2015. Primarily the company supplies our consumers in the Russian regions where we have a presence, and, of course, we ship to the export market.

Fuel oil production at Russian refineries decreased by more than 10 percent in 2016, in connection with new facilities coming into operation, and production of diesel fuel and Euro-5 petrol grew to 28.4 million tonnes, surpassing 2015 figures by 42 percent. As far as production was concerned, the year was tense, but positive for the company.

Regarding our tax and budget payments, taking into account the privatisation deal you mentioned, total budget payments came to more than 3 trillion rubles.

Vladimir Putin:

Are you planning to meet with the investors?

Igor Sechin:

Yes, Mr. President. I wanted to ask you to meet with the investors taking part in the privatisation deal – our partners from the Italian bank Intesa, the Qatar Investment Fund, and Glencore – to underscore this deal’s significance and to brief you on the new projects in which they will take part. We plan to increase our active work with these partners. Right from the start, you helped to prepare this deal, followed it, and we would like to give our partners the chance to talk about the prospects ahead.

Vladimir Putin:

Fine.

Igor Sechin:

On international projects, the company continues working with its traditional partners and new ones. These include our Indian partners, ONGC, BP, with whom we are developing work, Exxon, Statoil, and Eni. Work is developing in all areas. We will increase supplies to China to 31 million tonnes this year, and at the same time, we have consolidated our refining capacity in Europe. We are now the third-biggest producer of petroleum products in Germany and we ship 18 million tonnes of oil to our own refineries there. We ship around 71 million tonnes to Europe as a whole, including the 10 million we supply to Belarus. As I said, we will deliver 31 million tonnes to China this year, and will start shipping to India. We will begin with 2 million tonnes this year and will increase this to 20 million tonnes, which corresponds to the refining capacity at the Essar refinery in Vadinar, which will now also become affiliated to Rosneft.

In 2017, we plan an investment programme of 1.1 trillion rubles. Particular focus will be on building up capacity at the new fields: developing the Suzunskoye, Lodochnoye, Russkoye, Kuyumbinskoye, Yurubcheno-Tokhomskoye and Taas-Yuryakh fields. Then there are our gas assets: Rospan, Kharampur, and the Kynsko-Chaselskoye field.

In 2018, we plan an investment programme of 1.3 trillion rubles.

Vladimir Putin:

Good.

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Link: http://en.kremlin.ru/events/president/news/53761

Putin.BLOG - PHOTO:

Vladimir Putin, Igor Sechin, Kremlin.
Vladimir Putin hold a meeting with Rosneft Board Chairman Igor Sechin.