Transcript of the beginning of the conference:

Vladimir Putin: Good afternoon. We are very glad to welcome you to Russia.

Recep Tayyip Erdogan: It is good to see you.

Vladimir Putin: Mr Prime Minister, this is a good opportunity to talk about our joint projects. First of all, as a prelude to our conversation, I would like to thank you and the Turkish leadership for your decision that enables us to start laying a gas pipeline system on the seabed of the Black Sea, from Russia to Bulgaria and in the exclusive economic zone of the Republic of Turkey.

I propose that we discuss this project today, as well as the other large-scale project that already involves companies from our three countries - a Turkish company, the Italian company Eni and two Russian companies - Rosneft and Transneft. I am talking about the project that you proposed to build an oil pipeline to be called Samsun-Ceyhan in Turkey from the Black Sea to the Mediterranean shore.

As you know, two days ago in Italy, a corporate agreement was signed between four companies - two Russian, one Italian and one Turkish - on the beginning of construction of this major and, in my opinion, pan-European project.

I would like to inform you that I have had preliminary talks with our Kazakh colleagues and friends. I know that Kazakhstan's President Nursultan Nazarbayev is now visiting Turkey and that you also plan to see him.

Our Kazakh colleagues have said that they are ready to work together on this oil pipeline. It seems to me that we could have a major international project that would certainly contribute considerably to providing energy security in Europe and improve the situation on global energy markets.

This is what I wanted to say at the start of our conversation. If you allow me to, I will yield the floor to Italian Prime Minister Silvio Berlusconi.

Silvio Berlusconi (as translated): Tayyip (addressing Recep Tayyip Erdogan), I also embrace you and hope that you'll congratulate me on Milan's win over Real Madrid yesterday.

I am also glad that the discussions on these projects have progressed. I know about your special relationship with this project, with the project to build the Samsun-Ceyhan oil pipeline. I know that this is a very important project for your country.

This project is becoming even more significant because it already involves four companies and it is becoming more and more international. Mr Putin told me that other companies may yet participate in it.

I am also glad that research on the environmental and seismic aspects of the construction of the gas pipeline across the Black Sea is to begin.

I also know how much of a soft spot you have for Istanbul. This will also facilitate these projects, and improve the environmental situation and the ease of transit through the Bosphorus and the Dardanelles.

I would like to congratulate you once again.

Recep Tayyip Erdogan (as translated): Dear friends, dear Mr Putin, dear Silvio. First of all, I send you greetings from Turkey with the most sincere sentiments. And I congratulate dear Silvio on Milan's win.

I would also like to say that I am glad that we are once again meeting via teleconference.

The recent increase in cooperation between our countries serves as an example for the entire world. As you know, Turkey serves as the only bridge between the countries surrounding it, all of which have rich reserves of energy resources and global markets. Accordingly, we are endeavouring to strengthen Turkey's positions as a transit country in the region and turn it into an energy hub.

I am confident that the projects that we have completed and will complete will contribute to the energy security of both our country and Europe.

The pipelines that began operating in the 2000s and those that are still being planned were and are, as you know, developed specifically based on this rationale. Examples include Blue Stream, Turkey-Iran, Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum, Turkey-Greece-Italy, Samsun-Ceyhan, Nabucco, Blue Stream 2, and Turkey-Iraq. Mr Putin's visit to our country on August 6, 2009 truly was important and meaningful. Silvio's being with us at the time gave the visit a special meaning. Those steps that we took at the time have given rise to a new process.

As you know, our ministers have met in Milan. And just as we fulfilled our pledges on South Stream, we received the joyful news that Kazakhstan would join the project. In a little while, I will meet with Mr Nazarbayev for a working lunch. We will take time to discuss all of these issues with him.

But, as my friend Silvio and my friend Vladimir said, after the project was completed, the pearl of Turkey, the Bosphorus Strait, would be freed to a great degree from environmental danger. We attach great importance to this. We promised my friend Vladimir that before November 1, 2009 we would inform Russia of our decision (on South Stream). I am very glad that we have fulfilled our promise. I am sure that our friends are also happy. The groundwork for the ensuing process is being firmly laid. I hope that we will continue our work with the same energy and confidence.

Vladimir Putin: I remember how we first began to discuss these projects with you on your visit to Sochi. We then decided to make necessary preparations to conclude an agreement at our next meeting, in Turkey.

It is our pleasure to cooperate with our Turkish friends, the Turkish Government, because all our agreements with you come to fruition and meet deadlines.

You mentioned the work of our colleagues, the ministers. It is true that ministries and businesses have been working hard. I think this is a good occasion to thank our colleagues for their joint efforts in taking this transitional but nevertheless significant step.

I would like to assure you that Russia is determined to fulfil all its commitments and agreements reached in the course of our bilateral and trilateral discussions. This applies to all areas of our cooperation.

You mentioned Blue Stream. Blue stream has already been successfully completed, and Italians took part in its construction. Nothing can prevent us from carrying out the Blue Steam 2 project to supply energy to third-party countries, as we agreed.

In a follow-up to the football topic, which Silvio touched on, I'd like to say that Russia has something to be proud of too. One of Russian clubs, Rubin from the Republic of Tatarstan, won a critical victory over Barcelona, a team that commands a great deal of respect in the football community. The last goal was scored by a Turkish player, which we would like to thank Turkey for.

Silvio Berlusconi: Aren't we complicating international relations, specifically with Spain?

Vladimir Putin: I intentionally said that Barcelona commands a great deal of respect. A lot of Russian fans like this team. But that's sports. This time the Russian team Rubin turned out stronger. I would like to reiterate that it was thanks in no small part to a Turkish player.

Silvio Berlusconi: My congratulations, but nevertheless I will have to talk to the Spanish Prime Minister.

I'd like to add that all these projects are critical to ensure energy security for Europe, including Eastern Europe. Last year Europe was freezing because Russian gas supplies through Ukraine were terminated, but new gas and oil pipelines will allow for diversifying supply routes in order to guarantee energy security.

Vladimir Putin: Mr Erdogan, you and I are speaking via teleconference today, but I hope to meet with you in Russia, in Moscow, or at any time and any place you wish.

Recep Tayyip Erdogan: I will pay a visit to Moscow to discuss South Stream and Blue Stream 2. We need to start mapping out our steps for these projects. Every visit to Moscow is a pleasure for me.

Of course it is necessary that corporate talks on these projects be fruitful. I believe that these talks will be completed in the near future. As for interaction at the government level, we are intent on sticking to our commitments.

Mr Medvedev has recently met with his Turkish counterpart in the United States. Turkey stressed that it is willing to continue developing our relations to lay the foundations for strong cooperation.

From our viewpoint, Eni, Calık, Rosneft and our Kazakh partners will make the world a stronger and more secure place by completing the Samsun-Ceyhan project. I am grateful to you, my friends Vladimir and Silvio, for your determination to truly work towards the completion of this project. It is very gratifying.

As far as the Spanish Prime Minister is concerned, to my mind, there's no need to get upset. Football is a sport, and the result of a game is unpredictable. However, sports, as well as cooperation in more serious areas, bring our nations and countries together.

I hope to visit Moscow shortly to meet with you personally, my friends.

Vladimir Putin: I agree. I'm sure our Spanish counterpart won't get angry with us.

Recep Tayyip Erdogan: And I will certainly meet with Silvio in Italy.

Vladimir Putin: He doesn't seem to be willing to invite us to Italy.

Silvio Berlusconi: I'm between your two countries, and so I'll always be happy to welcome you to Italy. I'd like to assure you that you'll certainly appreciate the menu I'll prepare for your visit.

Vladimir Putin: Silvio is giving our nations' companies a very difficult assignment regarding South Stream. He says that this pipeline must be constructed before Nord Stream.

Silvio Berlusconi: It's a challenge we must accept.

Vladimir Putin: Indeed, we are capable of doing so since we have the necessary experience in constructing Blue Stream in Turkey, and all three of our countries worked together on that project as well. The experience our three countries gained from that project will give us an advantage in this particular job.

I would like to thank Mr Erdogan for today's conversation and express the hope to see him here, in Russia, soon.

Silvio Berlusconi: Bye, Tayyip. Take care.

Recep Tayyip Erdogan: Thank you. Let our forthcoming meeting in Italy be accompanied by good news.

Vladimir Putin: I hope it will. We will ensure that it does.

Silvio Berlusconi: I'm looking forward to your visit. I hope it'll happen in the near future.

Vladimir Putin: Thank you. Good luck.