Translated material
In search of prey
Igor Sechin will take care of new preferences for the fuel and energy complex
Deputy Prime Minister Igor Sechin yesterday at a meeting with journalists revealed many secrets of the “oil and gas yard”. He believes that the industry he supervises does not even roll like cheese in butter, as it seems to ordinary people. Its profitability today is only 9.1%, while in the West this figure is 40-45%. Therefore, the Deputy Prime Minister hopes at a meeting on the problems of the oil and gas complex, which Prime Minister Vladimir Putin will hold tomorrow in Severodvinsk, to change established ideas and adopt several innovations, which until now have been talked about only in a whisper.The meeting was planned on an unusually large scale. Ministerial reports are one more valuable than the other. Of course, first a report from the head of the relevant department, the Ministry of Energy, Sergei Shmatko. Then Minister of Economic Development Elvira Nabiullina will talk about the prospects for the development of the continental shelf and about the next conditions for stimulating the industry as a mining industry. The head of the Ministry of Natural Resources, Yuri Trutnev, will talk about the reproduction of the mineral resource base. Minister of Industry and Trade Viktor Khristenko talks about how the petrochemical complex will help the fuel and energy complex become modern. It is also planned to discuss the price situation and stock trading. Market participants will also be given the floor.
Mr. Sechin outlined his main concerns (after all, he is the head of the board of directors of Rosneft). First of all, this is support for production levels. In the first quarter of this year, it fell by 0.3% compared to the same period last year. “We expect that the drop will not be significant, and by the end of the year we will eliminate the backlog,” the Deputy Prime Minister promised.
Representatives of the Western media were particularly concerned about whether Russia was able to fulfill its raw material obligations. Mr. Sechin explained that the recently adopted tax breaks for the industry will make themselves felt in the near future. And new ones are already on the way, with which Ms. Nabiullina will speak. According to Igor Sechin, in a broad sense, a reduction in the tax burden - a reduction in VAT or income tax - “can only please the industry.” However, the Deputy Prime Minister prefers a bird in his hand to a crane. Now he is negotiating with the Ministry of Finance about accelerated depreciation. “This is a priority for us,” Mr. Sechin emphasized. We will also talk about tax holidays for work on the continental shelf, in the Okhotsk and Black Seas. Support for brave souls going to sea is planned through infrastructural measures: building roads, connecting to energy facilities, etc.
The second and perhaps more important than the first (oil production) concern of Mr. Sechin is the issue of price-quality ratio in our fuel market. “We will not engage in any conspiracies or other manipulations,” the Deputy Prime Minister noted. He remembers several crisis moments when the price of gasoline in the regions doubled just because of an accident at one of the refineries, which immediately caused a sharply negative reaction from consumers. Mr. Sechin called for acting preventively in such situations: having information about planned repairs of capacities and replacing them accordingly. He also plans to cooperate in future with Rosrezerv in emergency situations.
And yet, the Deputy Prime Minister admitted, it is impossible to do without the construction of new alternative capacities for processing raw materials. Moreover, these will be not only refineries, but also fuel and refueling complexes in large “hubs”. Kerosene is now so expensive in Russia that it has surpassed the world price. In order to somehow level out the growth, the Deputy Prime Minister proposes to deprive the refueling complex of the possibility of intermediary activities.
If we return to the people's gasoline, here, according to Mr. Sechin, the government understands perfectly well: “The reduction in prices on the domestic market is directly related to refineries that are independent of vertically integrated companies.” However, the state cannot afford much here. There is an idea to build only one alternative oil refinery with a capacity of at least 12 million tons per year and an approximate cost of $8 billion. “This is a project. It’s complicated and expensive,” the Deputy Prime Minister did not pretend to be. In his opinion, the project can be financed from the funds of development institutions. Just the rumor of such a possibility (Mr. Sechin smiled) had an impact on the stabilization of prices. “Vertically integrated companies did not like this prospect very much,” he added, not without irony.
The Deputy Prime Minister announced the readiness of independent fuel producers to increase supplies to the domestic market. If not duties, but excise taxes are zeroed out. And he noted: “This option is being studied.” Mr. Sechin confirmed the government's intention to fight for non-discriminatory access to gas pipelines for independent producers. He, again as the head of the board of directors of Rosneft, is especially close to the meaning of this struggle.
Mr. Sechin also spoke about replacing government officials in the management of Rosneft with independent directors: “This work must be done carefully so that the company’s capitalization does not decrease.” I haven’t forgotten about the conflict between TNK-BP shareholders. The Deputy Prime Minister again confirmed the official position of the state - non-interference: “According to our data, they (TK-BP shareholders - Ed. ) have already begun a dialogue. We support... We support the work of BP in Russia in general. They introduce new principles of corporate governance, technology, personnel training, and transparency. This makes us very happy.” And he finished: “I am pleased that BP is a shareholder of Rosneft.” Along with other projects in the Russian Federation, their package exceeds a billion dollars.”