Transcript of the beginning of the meeting:

Vladimir Putin: Mr Miller, yesterday I had a meeting with managers from companies in the metals industry. We discussed cooperation between the energy and metalworking sectors in great detail.

And at the end of last year I asked that, when you arrange the purchase of vital equipment primarily from the metalworking industry, domestic producers should be your first port of call. I would like to hear what progress you are making with those metalworkers. How do you plan to develop the work in the near future? That is the first question.

And the second is, we are currently concluding our work on the basic parameters of the budget, the sections on revenue and expenditure. In relation to this, Gazprom's actions are of significant interest to us, and we consider them to be of great importance.

I'm sure you are aware of the proposals put forward by several members of the Government to change the scale for the mineral extraction tax and for customs duties. I would like to discuss this with you as well. What is your view on these proposals, and how to you regard them? Of course, taking into account the fact that we must consider the revenue side of the budget so that we are able to discharge all our duties, especially our social responsibilities.

Alexei Miller: Recently Gazprom has in its purchase of materials, equipment and pipelines, been lead by the directives set out by both the Government and yourself personally, in making Russian producers a priority in purchasing. I would like to report back that currently purchases of pipeline and technical equipment from Russian producers accounts for 90% of all purchases made by Gazprom. I can say therefore that we have moved almost entirely to purchasing from Russian producers.

Of course most of this is pipeline related. We recently outlined new forms of cooperation, in particular by signing bilateral protocols with pipeline producers, in accordance with which we let them know what tasks and goals we have set ourselves in the medium term. Since Gazprom has a major investment programme, pipeline related purchasing amounts to billions of dollars every year, and it is very important for these producers to understand what our plans are, so they can plan their production and finances accordingly. Therefore, we are working in a very straightforward manner. In addition, Gazprom tells the pipeline producers about all the technical aspects of the pipeline use, our desired specifications for the pipeline, the fact that, quality wise, it must meet the highest, most advanced standards.

I can tell you now that today's Ukhta-Bovanenkovo gas pipeline in Yamal is being built to the most advanced technical standards of both the pipeline and gas industries. It is indeed a new generation of gas trunk line system. That is why I can say that we have of late been achieving very good results in this area.

I think that taking the dynamics of current market trends into account, and here I mean the growth in demand for gas on the European and internal markets, I am confident that the extent to which these investment programmes are being implemented, and consequently the volume of purchasing from Russian producers will be maintained at that level recently attained.

Vladimir Putin: Good. What do you think about the mineral extraction tax and the customs duties?

Alexei Miller: I think that these proposals are so far unfounded. I think that, factoring in the growth in supply to both the European and internal markets, we can achieve the same results in figures as projected by the Ministry of Finance. I am confident, that this will be the case. Apart from anything else, I think it makes economic sense to consider the introduction of import duties on gas purchased by Gazprom abroad. This could become an additional source of revenue for the federal budget.

Vladimir Putin: As for import duties on gas purchased by Gazprom, that is a separate subject and we will not discuss it now. It is not a solely economic question. We will return to it later.