Transcript of the beginning of the session:

Vladimir Putin: Ladies and Gentlemen,

I'd like to begin our meeting today by discussing issues that are not directly related to its agenda. I am referring specifically to an initiative voiced at the United Russia regional conference in Volgograd on May 6.

We've repeatedly spoken about the need to create additional mechanisms for young, talented people to be able to realise their ideas and proposals.

I know that each of the agencies and departments represented here produces such proposals, in one form or another. But for our day-to-day work to run smoothly, the government will have to adopt the appropriate laws, by-laws, and other regulatory acts to filter out dishonest activity undertaken with a view to misappropriate budgetary funds.

But we all know just how difficult it is at times to get through all the bureaucratic red tape. That is why we presented the idea of establishing an agency for strategic developments, a mechanism intended to open up new social mobility for young talent.

The agency's work is to be arranged in three areas. The first has to do with new projects and initiatives of a practical nature.

The second is related to the assessment of qualifications. As I said earlier, we arranged for the Russian Union of Industrialists and Entrepreneurs to develop a special qualification system for us. Unfortunately, it is progressing rather slowly. But it represents yet another attempt to create this kind of mechanism with the help of people who know how to achieve tangible results.

And, finally, the third area is related to social projects for NGOs and individuals involved in culture and the arts, public health, and education.

I believe that the agency could organise work in all three areas. The Russian government could found such an agency under the purview of the prime minister.

The agency will need to develop a regional network so as to expand its outreach in finding and supporting fresh talent and promising projects.

The selection of projects and of candidates to work at the agency should be done as openly as possible. I propose using a special website for this purpose. 

Everyone willing to cooperate with the agency will be able to submit his or her application via the website. Projects and candidates for staff positions should be assessed by independent experts. We have yet to decide whom our expert panel should consist of and how its work should be organised. In my view, that’s an important responsibility, and I’d like you to come up with the relevant proposals.

Anyone interested will be able to apply, including for the positions of director general and department heads. Positive experience in working as an independent professional will be the key selection criterion.

I suggest we open the positions of director and department heads to applicants starting on May 25. We could set the agency for strategic initiatives’ official presentation for the same date. That’s something I discussed earlier with the Minister of Economic Development. I would now like Ms Nabiullina and First Deputy Prime Minister Igor Shuvalov to execute this decision without delay.

There's another thing. I received a letter from the rector of St Petersburg University. He’s asking that some of the Defence Ministry’s land and buildings not in active use be handed over to the university. I wouldn’t mind, personally, provided no damage is done to the Defence Ministry’s interests. The Ministry of Economic Development should arrange for some form of compensation to be paid to the Defence Ministry. But, prior to that, the issue should be agreed upon between the Defence Ministry and the Ministry of Education and Science. The idea is to put the grounds to good use with the assurance that the Defence Ministry’s interests aren’t undermined.

Now I’d like to return to some of our abundantly financed anti-crisis measures.  I’ve asked the Finance Ministry to look into the effect those measures made in 2009 and 2010.  Mr Kudrin will report to us on that now.

Alexei Kudrin: Ladies and gentlemen,

In February 2009, with the economic crisis at its peak, the government decided to allocate some 300 billion roubles in bailouts to companies involved in manufacturing industries. Two ad hoc commissions were set up to consider bids from civilian and defence-sector companies. The commissions provided 132 bailouts, worth a total 242.8 billion roubles.

Vladimir Putin: Meaning that almost all of the 300 billion roubles were disbursed?

Alexei Kudrin:  Yes. Another 35.7 billion roubles was put on offer, but the bid for that bailout failed to meet the requirements. So, only 81% of the projected amount was released, in the end.

A total of 93 companies benefited from that money; 80.3 billion roubles has been paid back by now, some of it early.

There’s been one case of recalling a bailout over a break with credit regulations. The beneficiary of a 150-million-rouble bailout tried to change the contract in a manner not provided for in the regulations. 

In a separate instance, a bank asked for 67 million roubles in overdue payments. There are other such cases currently under consideration, totaling 2 billion roubles. We’ll settle them with the creditor banks and will then force the recipient companies to meet their arrears. The banks that issued such loans will not be affected as they will receive our guarantee. The security used to be as high as 70% of the borrowed amount. The banks were also partially responsible, at a rate of about 30%. Therefore, 81% of the limit was used. The work is underway, and there are returns already. There are also cases under guarantee that involve budgetary claims, which is to be expected given the risks faced during the crisis.  

Vladimir Putin: What’s your take on the outcome of this work?

Alexey Kudrin: Mr Putin, by late 2009, 81% of this limit had been spent. As I said before, 93 enterprises used it, most of them major industrial enterprises. For some of them, it was a pivotal event that prevented their bankruptcy and allowed them to keep working.

Vladimir Putin: Thank you. Mr Zubkov, I asked you to check on fuel and lubricant supplies for agricultural producers.

Viktor Zubkov: Mr Putin, colleagues. Last week, I chaired a conference call with the regional authorities and invited the heads of all of our petroleum companies to participate. We discussed fuel and lubricant supplies for the spring sowing campaign and fuel prices.

We are moving ahead, and the government resolution is being implemented. As far as we know from the regions, there are no unresolved issues with fuel and lubricant supplies.

Although, as we know, spring has come 10-12 days late this year, spring sowing works proceed much more quickly than last year. Farmers have already planted some 600,000 hectares more out of 25 million hectares than in the previous year. This is almost half of the area that needs to be planted this spring. The total amount of fuel and lubricants necessary stands at around 2.7 million tonnes, of which 2 million tonnes are diesel fuel and 180,000 tonnes are petrol.

The issues raised by the regions have been settled. The amounts that I’ve mentioned were broken up by months. For instance, if a particular region has used all of its April supplies, it naturally wants advance supplies for May or June to be able to do work due in May. We sent a letter to the Energy Ministry and settled the issue. There are certain problems in a few regions, for instance, when they thought that previously farmed areas were insufficient. They will plant more as a result, and they will need more fuel for harvesting and the winter sowing campaign than was previously agreed upon by the Energy Ministry and the Ministry of Agriculture. This week, I instructed the Energy Ministry and the Ministry of Agriculture to come up with proposals for these regions and adjust the volumes that were agreed upon. This work is being done, and I believe they will complete it this week.  

Now, as for special prices. The price for diesel fuel in almost all Russian regions is 6,000 – 8,000 roubles per one tonne and in a few of them even 9,000 – 10,000 roubles cheaper than present market prices. For example, diesel fuel in the Saratov Region is sold at 16,900 roubles, while at the market, it’s available at the price of 25,000 roubles. That’s a good price. I believe that with all the work we’ve done, we will have no problem supplying fuel and lubricants to the farmers until the end of the year.  

There are also issues involved in Ai-80 motor petrol. You know that new technical specifications are due to be introduced. I spoke with people from the Federal Agency for State Reserves and appropriately instructed the Energy Ministry and the Ministry of Agriculture. We have identified approaches to solving the issue, since we still have a shortage of about 260,000 tonnes. There is a way to address this problem, and we will report back to you as our work proceeds.

Vladimir Putin: Keep an eye on it.

Viktor Zubkov: I have also instructed the relevant authorities to make budgetary funds available to agricultural producers. We’ve discussed this issue with the regions. Overall, the state programme is being financed as scheduled..

As I reported to you earlier, making most of these federal funds available to farmers does not affect the spring sowing campaign. However, I instructed the Agricultural Ministry to continue supervising the compliance of the regions with the provisions of the agreements that are being signed. All the more so as they’ve signed these agreements and filed applications for the allocation of budgetary funds. Now they must fulfill their obligations. We monitor this work closely, and the regions agreed to transfer their budgetary funds as co-financing to federal funding before June 1. We keep tabs on this work.

Vladimir Putin: Good. Mr Basargin, your ministry was supposed to compile the regional ratings of Federation members that passed the fall-winter peak with the best and worst performance results. Have you done so?

Viktor Basargin: Yes, Mr Putin, we have. We will finalise the discussion of the fall-winter peak during a teleconference due on May 19. The work is already completed for almost all Russian regions except two northern ones, where certain municipal districts finalise the work on June 10.  

We have compiled the rating in accordance with your instruction based on the results we were given and used 20 objective performance indicators to do so. First, this is about fulfilling the plan for getting through the fall-winter peak – and recording the number of glitches, emergencies, and accidents. It is also about fuel reserves, the failure to submit data or incorrect data, and a number of other indicators.

Such information and performance assessments have been executed for all 83 Federation members. I can name the regions that are on top and those that are at the bottom.

Vladimir Putin: Please name the best and the worst.

Viktor Basargin: The Tyumen Region and the Republic of Bashkortostan received the highest rating at 0.971 points.

Vladimir Putin: And who was the worst?

Viktor Basargin: The lowest ratings go to the Arkhangelsk Region (0.437) and the Republic of Khakassia (0.463). Unfortunately, these regions in particular experienced glitches and emergencies this year. I am, of course, referring to Nyandoma, a town in the Arkhangelsk Region that everyone is familiar with. There were problems with the utilities supplies in Khakassia, as well. There is a village there in which two power lines lost power, and life-support facilities didn’t have any back-up energy supplies. So, there was no heating, no power. They defrosted the boiler room and so on.

Vladimir Putin: What about Kamchatka?

Viktor Basargin: Kamchatka is also at the bottom of the list – third from the bottom with 0.481 points, or 81^st place.

Vladimir Putin: Please take note of this.

Viktor Basargin: Yes, I’ve already met with the new governor of Kamchatka, and we discussed various issues, including ones related to dormitories.

Vladimir Putin: And then again, we need proposals to change the situation for the better. We need not just to confirm that they are inferior but to figure out what should be done to improve them.

Viktor Basargin: Yes, we’ve got some recommendations, and we’ll post them on our website for anyone interested to see.

Vladimir Putin: Good.

Mr Levitin, you have some data on the performance of the transport sector for the first quarter of 2011, don’t you?

Igor Levitin: Yes. According to the preliminary first-quarter results, there was some growth in freight and passenger turnover for all types of transport, excluding sea shipments, which dropped by 1.9%.

Air traffic posted the highest growth rate at 9%, or 15,204,000 passengers.

The number of passengers using trains and public transport in urban areas increased 2%.

As for the drop on sea shipments, we put this down to seasonal factors and to the situation on the world markets.

Vladimir Putin: Fine. And when will Vnukovo’s main runway be reopened? The summer is just round the corner, and it will be the busiest time for airports.

Igor Levitin: Renovation has been underway since April 15. We informed all our potential clients in advance. Some of the flights were temporarily relocated to Sheremetyevo, others to Domodedovo.

There’s another Vnukovo runway currently in operation, or rather a 2,000-metre section of it, to be precise. We plan to have all our air operators back in early July. And next year we expect to complete the refurbishment of the main runway. In the meantime, the second runway will be used.

Vladimir Putin: Good. Ms Golikova, our programme to advance information technology in the health sector is to receive more than 25 billion roubles in budget allocations, correct? How is it going?

Tatyana Golikova: Mr Putin, you’ve instructed us to adopt a concept for the advancement of information technology in healthcare, which will be part and parcel of the sector’s modernisation programme. As you said, 24 billion is to be released for this purpose from the mandatory medical insurance fund, in addition to a supplement from the federal treasury. The regions are planning to contribute 10 billion roubles, all in all.    

The commission for promoting IT advancement among government and municipal agencies considered this concept on April 12 and asked us to confirm it by decree, which we did on April 28.

The main aim (behind the concept) is to provide efficient information support for the healthcare management system. The centrepiece of this concept is a federal data processing centre. It will incorporate, among other things, personalised health monitoring software and databases with details regarding medical personnel and institutions. It will also provide a variety of online services, enabling patients to set an appointment with a doctor or to sign up for a test.

This centre will pave the way for the introduction of a single mandatory medical insurance system, in keeping with the relevant law, which has been in effect since January 1, 2011.

We plan to create a network of affiliated centres in the provinces. Some of the regions already have the appropriate infrastructural facilities, and we’ll try to integrate these into the new federal IT centre instead of building things from the bottom up. 

The first leg of the project will run through 2011. By year’s end, all the regions should have the infrastructure to provide access to IT services for all medical institutions. They are supposed to offer new communications channels, computers and peripherals, and software to protect the confidentiality of personal data.

Previously, we decided that funds put aside under our healthcare modernisation programmes should not be released until the concept was in place. Now, in keeping with the instructions of an interdepartmental conference led by Alexander Zhukov, our ministry and the Communications Ministry have until July 1 to develop a new methodology that would allow the regions to launch their own IT health management centres. Parallel to that, the federal centre will be created.

The second leg will run through 2012. That year, more profound, systemic changes are to be made. Online health records, online appointments, and other IT services will then be made available to patients in the regions. Moreover, by going online, they will receive access to profiles of medical institutions and personnel working in their respective regions and will be able to make an informed decision on a doctor or a clinic. This is one of our mid-term objectives.

The programme will be financed with money earmarked in the three-year federal budget and also in the budget of the Federal Fund of Mandatory Medical Insurance.

Vladimir Putin: Good, thank you. When a Cabinet report was being delivered at the State Duma, some of the MPs asked about prospects for raising the efficiency of electoral commissions. This problem is becoming all the more topical now, in the run-up to parliamentary elections. That is why I’ve signed a resolution to improve the country’s electoral system. Mr Shchegolev, will you please comment on this resolution?

Igor Shchegolev: This is part of our Information Society programme, aimed at enabling citizens to exercise their constitutional rights using ICT. Work toward that goal is already underway in the Central Electoral Commission. During general elections in late 2010 and early 2011, such systems were launched in a test mode in 20 regions across the country. This time around, all the provinces will be involved.

The programme is to be fully completed before the end of 2015. But in major balloting stations, the improvements should be completed by year’s end. Our ministry has drafted the blueprints in collaboration with the Central Electoral Commission. 

There are funds available at the Central Electoral Commission to finance it. We propose approving the CEC initiative and authorising it to sign long-term agreements to build these facilities, since it is a complex and detailed system that will be deployed across Russia within a very short timeframe.

We plan to cover 60% of the polling stations with such systems by 2015. Those will be the systems that many in the audience are already familiar with, where the paper bulletins are simply scanned. There is a device that makes the entire process paperless. This will help make the commission’s work more transparent, speed up the final count, make it accessible to public control, and easier media placement. These are the goals of the programme and 12 billion roubles will be spent on it by 2013.

Vladimir Putin: Good. How much this year?

Igor Shchegolev: One billion roubles. And we have it.

Vladimir Putin: Good. Mr Avdeyev, how are preparations for the Tchaikovsky contest going?

Alexander Avdeyev: Mr Putin, the ministry’s goal was to restore the erstwhile high standing of this competition, because it used to be one of the top five international musical competitions and then during the past 20 years it slipped in status for a number of reasons.  Therefore, we have introduced drastic changes to the event. We asked Mr Gergiev (head of the Mariinsky Theatre) to lead the organizing committee. He has invited the best international musicians and vocalists to sit on the jury. No international competition has such a distinguished jury as ours.

We decided to hold the competition in Moscow and in St. Petersburg. Tchaikovsky spent many years in St. Petersburg, so it seems fitting to include it, all the more so since St. Petersburg now has better music halls than Moscow. I believe that St. Petersburg has the best music hall in Europe. I’m talking about the music hall in the Mariinsky Theatre. There is also the St. Petersburg philharmonic with a hall boasting ideal acoustics. Moscow has none of that. We do have the Great Tchaikovsky Hall and the Grand Conservatory Hall that is undergoing major repairs to be completed by the competition’s opening date.

Vladimir Putin: Philharmonic? Are you talking about the Great Philharmonic Hall?

Alexander Avdeyev: The Great Hall in St. Petersburg, the one that’s also known as the Temirkanov Hall (Yury Temirkanov is a conductor and People’s Artist of the USSR). I wish to thank the Economic Ministry and the Finance Ministry for allocating large sums for a major renovation at the Grand Conservatory Hall in Moscow, which will be completed by the contest’s opening date. We have also invited top quality competition managers. The organising committee is led by Mr Gergiev, as I mentioned. However, there will also be foreign members on the committee, leading experts in international competition organisation, such as renowned U.S. contest organiser Radzinski.

This year we have enlisted the best Russian orchestras, such as the Spivakov Orchestra, State Orchestra, National Orchestra, Temirkanov Orchestra, and Gergiev Orchestra. This is an unprecedented event, where young performers will play alongside the best Russian orchestras. Another unique feature of this contest is that its final will be directly broadcast over the  Internet. This will make the entire international music community, the spectators and judges, millions of people  watch it over the Internet…

Vladimir Putin: Can you hear concert music well over the Internet?

Alexander Avdeyev: Yes.

Vladimir Putin: Good acoustics?

Alexander Avdeyev: Yes, very good acoustics. For the first time ever, the winners will get a three-year contract to play with the best international orchestras at the best international venues. We have reached this agreement for the first time in the history of such competitions. There’s a lot of excitement, and I hope that the contest will turn out well because this year we will brush aside much of what killed it in the first place. We will not have teachers or officials from musical schools. Previous contests were not about children or their talent. It was a competition between the teachers and votes were based on schools and teachers. Like I said, there’s a great deal of excitement and, according to tourist agencies, the fact that we are holding the event in two cities will attract more tourists.

Mr Putin, let me invite you and the entire government to the opening on June 14. On July 1, there will be a gala concert of winners in Moscow and on July 2 a gala concert in St. Petersburg.

Vladimir Putin: Well, we’ve been to the museum already, now it’s time to see the competition.

Alexander Avdeyev: Right, the competition.

Vladimir Putin: Thanks a lot.

Mr Ivanov, you are back from the Kuril Islands. Brief us, please.

Sergei Ivanov: Yes, Mr Putin, the ministers of economic development, regional development, transport, natural resources and representatives from the finance ministry, health ministry, energy ministry and I made a trip to the Sakhalin Region and, most importantly, to the largest southern Kuril Islands, Iturup and Kunashir to see how the federal targeted programme “Kuril Islands Development” is progressing.

We adopted this programme in 2007 and it is slated to run until 2015. We began some actual work under this programme in 2008. As of today, we have invested 9 billion roubles in this programme. We retained this programme in full even during the crisis. Notably, the Sakhalin authorities doubled their financial obligations. This is a fairly rare occasion when the regional financing of a federally targeted programme is doubled. The governor understands the importance of developing the southern Kuril Islands and is doing his best to push this programme forward.

The situation has changed from what I had seen during my numerous previous visits. They have built many power facilities and have replaced all heating and power supply systems. Mr Basargin spoke about the winter peak season, and things are working well down there, no glitches whatsoever during the winter. They are making increasingly greater use of geothermal energy, which is an excellent option, since you don’t have to import coal, heating oil or diesel fuel, which are our conventional energy sources for remote locations and islands. A lot has been done in this respect.

Now, regarding the social issues. A modern 50-bed hospital was built on Iturup, a kindergarten, and a school. However, Mr Putin, the most important and the most expensive thing is the transport infrastructure. Today, they have almost completed a major overhaul of the Kunashir airport. The runway is almost ready and a small terminal will be commissioned this year. In other words, the airport will become operational.

We will complete the first phase of the airport on Iturup in 2012; this is the main airport of the southern Kuril Islands. Local airlines will be able to land there in any weather. Poor airport facilities and volatile weather make it difficult to fly in and out of this area, and air transport is the main way to get to the Kuril Islands.

They have built two ports on Kunashir and Iturup for small fishing boats.

At the meeting, the ministers and deputy ministers discussed this programme together and decided that it was necessary to increase its funding up to 2015 by 8.4 billion roubles and that these funds would be primarily spent on extending the runway for Iturup Airport to enable it to accommodate the An-24 and Il-76 medium-range aircraft, as well as Emergencies Ministry planes…

Vladimir Putin: It's 2,400 metres long?

Sergei Ivanov: Yes, 2,400 metres. We are about to commission the 1,800 metre runway. We are also building a deep-water pier on Iturup to bring not only fishing boats but also deep-water passenger ships into port.

I must say that local private companies are doing very well in developing fishing and fish farming. The company Gydrostroy has built a number of modern, high-tech enterprises for fish processing and breeding. We were very impressed by their unique technology.

The amendments to the 2011 budget provide for additional funding in the amount of 1.2 billion roubles. We have already agreed upon it. Of this sum, 500 million roubles will be primarily spent on completing the construction of Iturup Airport and hard surface roads. As you know, they have never had such roads on Iturup. So, we are allotting additional money for transport purposes up to 2015.

On my way from Sakhalin, I stopped again in Vladivostok. We held a meeting there on the protection of Far Eastern leopards, endorsed the borders of the Leopard Land National Park together with the top officials of the Primorye Territory, and passed all the necessary decisions.  

Vladimir Putin: Well done. Thank you.

Now I’d like to make a few remarks about some items on the agenda. First of all, I’d like to emphasise the need to consolidate the foundation for innovative development. We must form a competitive cohort in domestic science and education, support scientific schools, and create modern infrastructure in our higher educational institutions.

The strong scientific profile of such institutions, as well as active research and effective commercial use of their research projects is the norm for the world’s leading universities and an indicator of their success and prestige. The same is true for us.

We are planning to earmark some 70 billion roubles for the development programmes of state universities in Moscow and St Petersburg, including 8 federal and 29 national research universities in 2010-2012.

We have also adopted a number of major proposals aimed at developing national incentives for innovation and creating attractive and well-paid jobs – first and foremost, for students, graduates, and post-graduates.

First, starting in 2009, higher educational institutions and research centres received the right to open small innovation and technology development companies and contribute their research to the latter’s charter capital. There is a whole package of benefits and preferences for such companies: they can use a simplified taxation procedure and make insurance contributions at the rate of 14% rather than 34% for the period of 2011-2017. We are now discussing other proposals in this sphere, but we have already made decisions regarding this group of companies. They are also allowed to rent premises from their founders – institutions of higher learning and research centres – without tenders. Moreover, they will receive the right  to transfer the results of their intellectual activities to third parties. Incidentally, we have made all of these decisions after meeting with professors, students, and post-graduates at higher educational institutions.

The idea to make these institutions and research centres more independent has fully justified itself: more than 900 innovation companies have been established in less than two years. Just imagine – more than 900! Furthermore, their number is constantly growing at a fast pace. They currently employ more than 5,000 people. In addition, last year we launched several new instruments of support for innovative activities in higher educational institutions.

A total of 39 billion roubles will be spent to finance the proposed package of measures up to 2012. Thus, the government will pay 50% of all costs on R&D, design, and experimental and technological work performed by institutions of higher learning under contract with enterprises. These subsidies total 19 billion roubles. We hope – and this has been mentioned more than once – that private enterprises, that is, businesses, will pay for the remaining 50%. 

Another eight billion roubles will be spent directly on the development of infrastructure for innovation at institutions of higher learning and the formation of new centres for public access to scientific equipment and business incubators. Today, 56 scientific centres are already receiving this support.

We have also established special grants worth 150 million roubles each. They are designed to fund scientific research conducted in our higher educational establishments by the world’s best professionals. The first 40 grant recipients have already been determined. Two of them are Nobel Prize and Fields Medal winners. All in all, 507 leading scientists from 29 countries competed for these grants in 2010.

It goes without saying that these institutions of higher learning must take advantage of the opportunities afforded by public-private partnerships. I’m referring to so-called technological platforms. At the meeting of the government commission on high technology and innovation, we discussed the prospects of developing this mechanism. The current list of 27 technology platforms includes more than 150 higher educational institutions.

These institutions should be more active in proposing and implementing their developments under the innovation programmes of companies that have state participation. And our state companies should be more active in establishing closer cooperation with higher educational institutions.

Colleagues,

I’d like to discuss one more important issue that requires responsible and well-orchestrated efforts on behalf of the federal and regional authorities. It is impermissible to have a formal, bureaucratic, or callous approach to this issue. I’m referring to the social adaptation of young people leaving orphanages and children’s homes. In simple terms, this is a question of how to help them find their place in independent adult life, acquire normal living conditions, receive professions, and find jobs. Needless to say, we must do all we can to protect them against risks, swindlers, and overt criminals.

Many regions have taken measures to protect such young people and monitor their lives. They have adopted laws to give them additional privileges in employment. We have allocated more than six billion roubles in subsidies to the regions from this year’s federal budget to buy flats for orphans. I’d like to emphasise that this is 5.6 times more than during the previous year.

Yet, we must openly admit that we still don’t have a systemic approach to this issue. Government bodies must follow up on every young person leaving a boarding house. They should know everything about his or her life, requirements, and difficulties.

This is primarily a responsibility of the regions, and I’d like to make this point clear: we allocate the subsidies to the regions but they should organise this work themselves with the support of the relevant ministry. Mr Fursenko, I’d like to ask you to give us a detailed report on this score today.

In conclusion, I’d like to comment upon one more  important issue that is related to the development of the fuel-and-energy complex. We are planning to set up powerful oil and gas production centres on Yamal, in eastern Siberia,   the continental shelf.

Obviously, the development of such remote and hard-to-access deposits as of yet lacking in infrastructure is an expensive and risky undertaking.

I’d like to remind you that we used incentives for the development of these new deposits. Thus, we made oil companies exempt from the production tax. Now there is a proposal to extend tax benefits to companies that are dealing with promising gas projects. As of January 1, 2012, we will introduce a zero percent Mineral Extraction Tax on Yamal gas to be used for the production of liquefied natural gas (LNG).

Let’s get down to work.