Russian First Deputy Prime Minister and Chairman of Board at Gazprom Dmitry Medvedev gave an exclusive interview to Interfax.
Soaring oil prices on world markets will not lead to unexpected gas and energy prices on Russia's domestic market, Russian First Deputy Prime Minister and Chairman of Board at Gazprom Dmitry Medvedev has said.
"There are clear directives, the government has decided on how to handle the gas and energy price policy for the next few years. There will be no surprises and all parameters we have agreed upon. The parameters that would establish domestic prices as profitable as export prices will be met," Medvedev told Interfax on Friday.
"In other words, I am certain that we will not destroy the balance that exists in the domestic market for businesses, utilities and individuals," he said.
"As for foreign markets, certainly, growing oil prices are a key factor of economic development which should not be underestimated. For Russia this factor is particularly important. At the moment, Russia's economy rather benefits from such growth of oil prices, because most of our plans focus on developing the oil and gas industries. But we should not delude ourselves," Medvedev said.
"We should not build all our investment plans, especially social programs, only on rapidly growing oil prices. On the contrary, we must consider negative scenarios related to the reduction of oil and gas prices in order to be able to respond to all challenges of today's economy, so that our economic and investment plans are not jeopardized and our social programs are stable regardless of the situation in the oil market," the first deputy prime minister said.
"Not only must the oil and gas industries be developed but other ones as well," Medvedev said.
"We must return to those areas where we have always held key positions. We have marvelous production facilities, excellent specialists in the field of outer space and aircraft technology, communications, and we have a very potent industry which has been long waiting for adequate investment and careful attention," he said.
"We must look at agriculture, a third of the country's population lives in rural areas. Agriculture makes up a significant portion of GDP. We must develop new areas such as information technologies. We have already made a good start, we do have what is called "national creativity" - this is our strength. If we do not develop these areas, we will definitely end up on the margin of world civilization," Medvedev said.
"This is why the growth of oil and gas prices and the achievements of the Russian oil and gas segments must be offset by growth in other industries," he said.
Funding and implementation of priority national projects has not contributed to the growth of inflation in Russia, Dmitry Medvedev has said.
"I think that national projects have not affected inflation in the least," Medvedev said in an exclusive interview with Interfax.
"The fact is that this is a lot of money [funding of national projects], yet these funds are not too great in terms of the national budget to affect inflation, even if we take these figures into consideration," Medvedev said.
The national project in the agricultural sector "cannot make any additions, even hypothetical ones, to inflation," he said. On the contrary, Medvedev said. These projects are extra jobs in rural areas, additional investments in stock-raising, improving the social conditions of villages, he said. "There are no factors pushing up inflation here," Medvedev said.
The same is true for construction of accessible housing, Medvedev said.
"Therefore I think, there has been no contribution [from national projects to inflation]," Medvedev said.
Medvedev, who is also board chairman of Gazprom (RTS: GAZP), listed several causes for the rise of inflation indicators in Russia. "The first cause is the increase of food prices on the world market. This factor has added about 2% to inflation compared to the indices on which we used to predict 8% inflation this year," Medvedev said.
Yet another factor contributing to the increase in inflation was a "massive capital inflow," he said.
"It naturally includes a positive feature because it increases investment possibilities within the country. But it also includes some inflationary components," Medvedev said.
"So these two factors served as a basis for increasing inflation rate against the figures that had been forecast for the current year," Medvedev said.
The government "will and shall take every needed measure to curb this rate and prevent inflation growth, and reach the parameters that we have planned," Medvedev said.
Gazprom (RTS: GAZP) could grow into the world's largest company in terms of capitalization, Dmitry Medvedev has said he believes.
"Gazprom's growing capitalization pushes the whole stock market, and vice versa some problems in the company could result in problems on the market in general. That is why the Gazprom board and management closely follow all processes concerning company's capitalization," Medvedev said in an exclusive interview with Interfax on Friday.
"Now, given the recent growth of stock indices, company's capitalization totals roughly $300 billion. This is a very high figure, but we think that this is not the end," Medvedev said.
"Why do we think so? Just because Gazprom is the world largest gas company in terms of reserves, and we can improve its work the way that stock indices and the international business community give relevant ratings to such improvements," Medvedev said.
"Various spheres in which Gazprom works should be developed: we should invest in the development of new fields and transportation in various directions, we should diversify the routes, and, deliver [gas] to traditional markets, such as Europe, and we should think about the Far East, Asia, and America," he said.
"It is natural that such measures directly influence Gazprom ratings. We should not only think about deliveries to other markets, but we should also structure the company's work in the country. We should all be involved in making its [Gazprom's] internal structure more rational. We are now engaged in business activities in the energy sector and have strengthened our positions in the oil market," Medvedev said.
Medvedev paid particular attention to issues related to the corporate management and company's transparency during the interview. "A company is judged by the extent to which it is open for analysis. Gazprom has done a good job in this area over the past eight years. In 2000, there was an impression that the company worked as a Soviet ministry, on the basis of which Gazprom evolved. Now Gazprom is a full-fledged joint stock company, which the international auditing community audits, which is improving its corporate management, and is involved in budgeting activities," Medvedev said.
These things contribute to company's capitalization, he said. "If these areas continue to develop successfully, Gazprom will have a good chance to continue increasing its capitalization up to a level which can be compared to the highest figures in the world. There are prospects to evolve into the world's number one company. In my opinion, there are several subjective and objective preconditions for this," Medvedev said.
Rumors of a possible reshuffle in the top company management of Gazprom (RTS: GAZP) have been denied by First Deputy Prime Minister and Board Chairman Dmitry Medvedev.
"Rumors always circulate, life continues. One should pay no attention to them because rumors are always rumors," Medvedev said in an exclusive interview with Interfax.
"The managing staff of Gazprom is stable and everyone is on the job," he said.
Asked whether there may be frictions between Gazprom and states neighboring Russia over gas deliveries ahead of the New Year and whether journalists covering the subject will be able to see in the New Year with their families, Medvedev said, "I hope that both Gazprom staff members and journalists will be able to raise their glasses of champagne at home. To this end Gazprom staff members are now working quite hard thrashing out several issues with our partners."
"Our counterparts are quite difficult. It is true that from time to time they get their own ideas about possible ways of structuring their further economic relations with Gazprom. And these ideas contradict modern tendencies of regulating the oil and gas market, they contradict the processes that are unfolding throughout the CIS and in this country. I mean the transition to a market economy," Medvedev said.
"We have made these decisions for ourselves, painful decisions. And we would want our partners to understand too that they should be buying gas at market prices without insisting on any exclusive conditions. If this understanding prevails - and there are certain prerequisites for that, we have very high chances of seeing in the New Year with our families," he said.
Russia will begin delivering natural gas to China in the nearest future, Medvedev has said.
"We hope to come up with a practical cooperation model in gas deliveries in the next few years. We are now coordinating the parameters of prices and routes. I think this is a matter of the nearest future, and comrades from China are showing the greatest interest on this matter," he said in an exclusive interview with Interfax on Friday.
"We are speaking about several possible routes to ship Russian gas. Calculations are being made for different options," he said.
The question of Russian oil deliveries to China has entered a practical stage, with Rosneft (RTS: ROSN) and Chinese entities implementing relevant contracts, he said.
"The energy sector is an absolutely key aspect in Russian-Chinese economic interaction, because Russia is a leading energy power in the world and China is the biggest nation on the planet with a robustly growing economy that has reached an unprecedented pace of growth," Medvedev said.
"However, oil and gas are not all the Russian Federation has, of course. Clearly, interaction in transportation and communications is also crucial to us: that is, everywhere we can cooperate, where we have very good opportunities for interaction," he said.
"There are also other sectors in which we also cooperate quite actively, nuclear power engineering in particular," he said.
"Recently, we launched the first stage of the Tianwan NPP project and we are now saying that the second stage will be built in the next few years and commissioned," Medvedev said. "So far, beginning with September everything has been alright and I hope that cooperation in nuclear power engineering will continue to develop according to plan in the future. This is a very important segment of our interaction," Medvedev said.
Asked whether Russia intends to learn from China in preparing for the 2014 Olympic games in Sochi he said: "Our Chinese colleagues are practically ready to host the Olympiad and undoubtedly it will be an unprecedented event given China's scale, interest in the Olympiad and the complexity of the tasks they are facing."
"In this sense I am sure that our delegation that will go to China next year will find a chance to talk to our Chinese colleagues and discuss what problems they had and what recommendations they could give so that our Olympiad in Sochi would be held at a level not lower than the Olympiad in Beijing," Medvedev said.
Medvedev said that there are also more practical elements of cooperation, because China has accumulated experience in building various sports facilities. "Here we also have things to discuss," Medvedev concluded.
The results of the national Year of Russia in China, and the Year of China in Russia are unprecedented in the history of bilateral relations, Medvedev has said.
"The results are really outstanding, and there has been nothing of the kind between our countries for decades, at least," Medvedev said in an exclusive interview with Interfax.
Moreover, such events were rare even in the period of good Soviet-Chinese relations, Medvedev said. "There has been nothing of the kind for the whole history of Russian-Chinese and even Soviet-Chinese relations, I think," Medvedev said.
Some 200 or 250 events have been held during the Year of Russia in China, and the Year of China in Russia, Medvedev said. "And these have not been small meetings or talks on the sidelines. These have been large events: national exhibitions, business forums, a Russian Language Week, openings of various festivals," he said.
Such events have also been accompanied by results in economic cooperation, Medvedev said. During the March visit of Chinese President Hu Jintao to Russia, "more than 20 agreements were signed for $4 billion," Medvedev said.
"These are quite practical results of our Year in China and the Year of our friends in the Russian Federation. And $500 million of these agreements are agreements for supplies of equipment and machinery from Russia to China, and this is most urgent for us," Medvedev said.
"I think that national years stimulated the whole socioeconomic interaction between Russia and China. We began to have more contacts, we began to socialize better, and this communication has taken some tangible forms," he said.
The main result of the events held in terms of national years is that "we have come to better understand the Chinese, and the Chinese have come to better understand us," Medvedev said.
Via: Interfax |exclusive interview for Interfax
