Sergei Ivanov's opening remarks:
Ladies and gentlemen,
To begin with, I would like to comment briefly on the main topics of our meeting. Today we will consider several issues related to geological prospecting and the development of deposits on Russia's continental shelf and oceans beyond our national jurisdiction.
Note that this first issue is not new to our agenda. We have considered various aspects of this problem at past meetings. This issue is of strategic importance to the social and economic development of this country and the global economy in general.
As you know, the Russian continental shelf is the longest in the world. The waters under Russia's jurisdiction include 14 seas and several shelf and deepwater ocean areas. The total area of Russian waters is 6.3 million square kilometres, of which over 4.2 million square kilometres offer good prospects for the development of hydrocarbons, including oil and gas. As we know, the most promising areas are the Arctic, of course, and the Far East.
Of the northern and far eastern seas, only the Barents Sea, the Kara Sea and the Sea of Okhotsk have been studied to a moderate degree, however the waters of the United States, Norway and Britain have been studied tens and sometimes even hundreds of times more thoroughly than our own.
The Laptev, East Siberian and the Chukchi seas have not been studied yet due to the severe climate, the extremely high costs involved, and seasonal factors.
Therefore, when assessing the hydrocarbon potential of these territories, we have to rely on estimated values and speak about 100 billion metric tons of equivalent fuel and a high probability of discovering large and unique gas and oil fields.
I'm sure you all understand that such arguments aren't convincing to prospective investors, not to mention the marketing edge that fully developed fields have over undeveloped ones.
We must admit that the geological and geophysical exploration of Russian waters has been very inadequate and uneven.
That said, even when federal funding for geological prospecting on the shelf accounted for only 5% of the total expenses of mineral prospecting services, 51 oil and gas fields were discovered on the shelf; nine of them are so-called transit fields, meaning that they are situated partly on the land and partly on the shelf.
The largest fields include the well-known Shtokman field, the Prirazlomnoye field in the Barents Sea, the Leningradskoye, Rusanovskoye, Yukharovskoye and Kamennomysskoye fields in the Kara Sea, the Arkutun-Daginskoye, Piltun-Astokhskoye, Lunskoye and Chaivo fields on the Sakhalin shelf and the Filanovsky and Khvalynskoye fields in the Caspian Sea.
Practically all geological prospecting in the Caspian Sea and the Sea of Okhotsk was completed in 2009. This year, federal funding will go primarily toward work in the Arctic. In other words, all funding for geological prospecting on the continental shelf will go to the Arctic only.
I don't think there is any need to go into the problems of developing the Arctic shelf. Everyone in attendance knows the concerns about Arctic development that the president just raised at the meeting of the Security Council. They are reflected in the Marine Board decisions that we made in Arkhangelsk last year. I'd like to ask the board members to step up their implementation of these decisions.
Apart from the difficulties related to funding geological prospecting, I'd like you to look at the purely organisational problems that are seriously holding back development of the continental shelf.
In 2008, we made amendments to the law On Natural Resources, which have fundamentally changed the leasing process. All parts of Russia's continental shelf were given the status of federal importance. The government will distribute them on a no-bid basis. The new rules have drastically decreased the number of subsoil users. In effect, there are only two state companies that are subsoil users - Gazprom and Rosneft.
Moreover, geological prospecting was taken off the list of possible forms of subsoil usage on the continental shelf, which does not encourage the reproduction of mineral resources and limits the state's opportunities of receiving additional geological information.
I am requesting that the Ministry of Natural Resources in its report on the first issue analyse the two year-long practice of using the new procedures and make proposals based on the president's recent instructions. Also, please inform the Marine Board about the efforts to delineate the outer boundary of Russia's Arctic continental shelf. We have already discussed this at a separate meeting. Mr. Chilingarov is nodding his head (Artur Chilingarov, a presidential envoy on international cooperation in the Arctic and the Antarctic).
I'm interested in what has been done since the Marine Board made these decisions. I'm asking about concrete action, not words. I will not discuss geological prospecting or developing deposits in the world's oceans outside of our national jurisdiction. I believe this will also be mentioned in the report.
But I'd like to hear about what has been done in recent years to establish Russia's rights to the outer shelf of the Mendeleyev Ridge.
Now I'd like to say a few words on the measures to increase the merchant marine registered under the Russian flag. We have discussed this issue repeatedly at the meetings of the Marine Board. The Ministry of Transport also discussed this quite recently, a month ago.
Obviously, this is a complicated task whose success depends not only on the condition of our ship-building industry but also on our credit, financial, tax and customs policies. Put it this way - currently we are not in a very good position. In the beginning of this year, 1,207 ships with a gross tonnage of over 4.5 million tons were sailing under the Russian flag. Out of this number, 347 ships with a gross tonnage of almost 1.5 million tons were entered into the Russian International Registry, which was established several years ago. By comparison, 196 ships with a gross tonnage exceeding 12 million tons are sailing under foreign flags. As they say, compare the two and feel the difference.
At the same time, out of the 24 ships with a total deadweight of almost 2 million tons that were bought by Russian ship owners abroad, only 4 sail under the Russian flag - only 4 ships out of 24. True, this year they were joined by the Mikhail Ulyanov, a quality modern ice-class tanker. The Kirill Lavrov, a new tanker, will soon be ready. But I think only Sovkomflot (Modern Commercial Fleet) is more or less seriously engaged in this business.
The Ministry of Transport has embarked on a number of major shipbuilding projects with the United Shipbuilding Corporation and other shipyards. Sovkomflot, VEB-Leasing, Rosneft and NOVATEK signed a number of agreements with the United Shipbuilding Corporation on building ships and platforms for various purposes at domestic shipyards, and this is, of course, good news.
That being said, as I have already mentioned, we must realize that only a comprehensive, coherent solution aimed at developing shipbuilding-related industries can allow us to achieve a long-term strategic result. This applies to customs and tax legislation and to the credit and financial policy in general.
To achieve this we must make use of the government's ability to regulate relations, improve our tax and customs legislation, and render varied government support. On this front, we are pinning some hope on the draft federal law On Measures to Support Russian Shipbuilding and Navigation and on Amendments to a Number of Legislative Acts of the Russian Federation. The Ministry of Transport is currently working on this draft law in cooperation with other relevant federal bodies.
This is why I would like your report on the second issue to focus on the main provisions of the amendments that you, Mr Levitin, are now making to existing legislation.
A few words on the third issue, that is providing social insurance for Russian sailors working on foreign flag vessels.
I am requesting that the Marine Board be informed of the progress made in carrying out the instructions that we drafted at the meeting of the Government Commission on Transport and Communications on October 30, 2009. What have we accomplished in the past five months? Apart from the proposals aimed at improving the work of federal executive bodies - this should be done; we have taken relevant decisions and appointed officials to implement them - I'd like to receive information about the crewing companies that recruit Russian nationals to work on foreign flag vessels. It has been discovered that some of them are actually recruiting firms that bear no responsibility for the results of their work. They are being paid simply for acting as an intermediary.
We also need to discuss measures aimed at increasing sailors' responsibility for making their own choice of where to work.
Unfortunately, sailors currently have to make decisions about foreign employment on their own. Those working on flag of convenience ships make practically no payments to mandatory medical and social insurance funds or the Pension Fund, and pay no taxes from their salaries to the budget. And they don't join sailors' trade unions because they don't want to pay the fees.
But when sailors get in trouble as a result of this thriftiness, they suddenly remember their Motherland, and they say that Russia must help them no matter what. I am not referring to pirates seizing vessels in the Indian Ocean, which is a rare event compared to the problems of our compatriots working on foreign flag vessels.
The point at issue above all concerns irresponsible employers and businessmen acting in bad faith, against whom sailors are defenceless. Don't misunderstand me. We should certainly protect the interests of our citizens in any situation.
The Ministry of Foreign Affairs, the Ministry of Transport, the Federal Migration Service and any other agency should be involved in this work when necessary. On the other hand, we should create understandable rules of the game, determine the parties' obligations, and inform each sailor about them so that they will be aware of the consequences of their choice.
We often speak about loopholes in national laws that reduce the social insurance of sailors working on foreign vessels. There are two ways to resolve this problem.
First, we can amend laws and regulatory acts, which we are doing. But this takes time and is not always effective, because no law can cover all situations in life.
The second option is to establish a legal entity in Russia that will represent the interests of sailors working on foreign vessels. The trade union can assume this role, which would not require any amendments to existing legislation. This would quickly resolve all the problems involving medical, social and pension insurance, as well as many other problems.
What's important is that sailors will not have to personally take their problems to government agencies if something happens in Russia - and we know that officials often wave their problems off like buzzing flies. Our sailors will have an official representative who will be able to talk with any agency, both state and ¬private ones, as an equal.
In short, I think that we should choose the second option. This is all I had to say on this issue.
Let's turn our attention to the first issue then.