Mr Sechin said that oil production slumped 0.3% in the first quarter of 2008, compared with the previous year. "We don't expect the decline to be considerable," he said. "In general, we hope to make up for it before the end of the year." The official expressed confidence that annual oil production would grow in 2008.

Mr Sechin told journalists that the Government was considering establishing an independent oil refinery in Russia "for supplies to the domestic market." He said such a refinery would be "a good step toward creating competition."

Mr Sechin said the final decision on the issue had not been made yet, adding that the issue was considered at the request of oil companies. "It would be premature to speak about the parameters, but we will support this project," the Deputy Prime Minister said.

Speaking about the Government plans to stimulate development in the sector, Mr Sechin said they were considering cutting the excise taxes on petrochemicals to zero and further lowering the taxes for oil companies.

"On the whole, we are considering different ways to reduce the tax burden," he said. "I think one of the ways to ensure additional supplies of petrochemicals to the domestic market is not to lower duties, but to consider cutting excise taxes to zero." He also said that additional calculations were needed to determine the effect such measures would have on the country's economy, but said further reduction of the mineral tax was unlikely. Mr Sechin said that one of the possible measures was "tax holidays" for companies developing offshore deposits.

Touching upon the issue of Government representatives on the boards of directors of large companies such as Rosneft, the Deputy Prime Minister said they would continue this work but "accurately, so as not to lower capitalisation" of said company.

He recalled that candidates for Rosneft's Board of Directors had been submitted for consideration in January, as part of the "general trend" of appointing independent directors. However, the idea was not formalised at the time. Independent directors already control audit, science and technologies, and resource committees at Rosneft. The introduction of more independent directors to Rosneft's board is still a ways off, Mr Sechin said, adding, "But I think we could consider it".

After the briefing, Mr Sechin answered a question about the situation with TNK-BP. He said he was confident that the conflict in the company would not affect its production. "They have a very good structure of reserves," he said, adding that its shareholders also wanted it to work effectively.