Full transcript of Russian President Vladimir Putin's address on "Global Energy in a Multipolar World" to the Russian Energy Week Forum.
Good afternoon, friends, ladies and gentlemen!
I welcome the participants and guests of the Russian Energy Week, a recognized, authoritative platform for dialogue on key topics of global energy.
Such direct, open communication is especially necessary now, when the world economy as a whole, the fuel and energy complex are going through, frankly, an acute crisis associated with unstable price dynamics of energy resources, an imbalance in supply and demand, as well as openly subversive actions of individual market participants who are guided solely by their own geopolitical ambitions, they resort to outright discrimination in the market, and if it doesn’t work out, they simply destroy the infrastructure of competitors.
In this case, I mean, of course, the sabotage of the Nord Stream 1 and Nord Stream 2 gas pipelines. There is no doubt that this is an act of international terrorism, the purpose of which is to undermine the energy security of the entire continent. The logic is cynical - to destroy, block sources of cheap energy, deprive millions of people, industrial consumers of gas, heat, electricity, and other resources and force them to buy all this at much higher prices. Force.
The attack on Nord Stream has become a most dangerous precedent. It shows that now any critical object of transport, energy or communication infrastructure is under threat, regardless of what part of the world it is located, by whom it is controlled, laid on the seabed or on land, on land.
This was confirmed by – I don’t want to talk about it, we are at [Russian] Energy Week, seemingly not directly connected with this, but nevertheless I cannot but say that the terrorist attack on the Crimean bridge, committed by the Ukrainian special services, was also confirmation of this. I have already said that the regime in Kyiv has long been using terrorist methods, organizing political assassinations, ethnic cleansing, reprisals against civilians. Then they themselves post it on the Internet - they realize that they made a mistake - they immediately erase it. But still, everything remains on the network. They do not stop at nuclear terrorism either, I mean the shelling of the Zaporozhye nuclear power plant, and the commission of terrorist attacks around the Kursk nuclear power plant in Russia. In this series, of course, are attempts to undermine the Turkish Stream gas pipeline.
I repeat: all the facts have been proven and documented, and the ideologists, customers of these crimes are their ultimate beneficiaries, beneficiaries - those who benefit from instability and conflicts.
And who is behind the sabotage at Nord Stream? Obviously, those who seek to finally break the ties between Russia and the European Union want to finally undermine and finish off the political subjectivity of Europe, weaken its industrial potential, and seize the market. And of course, someone who is technically – I want to emphasize this – is technically capable of arranging such explosions and has already resorted to such sabotage, and was caught by the hand, but remained unpunished.
Well, the beneficiaries, the beneficiaries, are already clear. I think that there is no need to go into details here, because the geopolitical importance of the remaining gas systems is increasing. They pass through the territory of Poland (Yamal - Europe), through the territory of Ukraine, two streams, all at one time Russia built with its own money. And also the USA, of course, which can now supply energy resources at high prices.
As they say in decent companies, highly likely, everything is clear, everything is clear who is behind it and who is the beneficiary.
It is now possible, indeed, on a large scale to impose natural liquefied gas from the United States on European countries, which is clearly inferior in terms of competitiveness to Russian pipeline gas. After all, prices for American LNG are much higher, it was well known to everyone before, and even more so now, but there are still additional risks, in addition to price indicators. The risks lie in the fact that all this is very unstable and any supplies may "float away" to other regions of the world. And we have seen this, by the way, more recently, when American tankers carrying LNG to Europe turned around halfway and changed destinations because LNG sellers were offered a higher price elsewhere. At the same time, the interests of European buyers were ignored.
I also want to remind you who then came to the aid of Europe and sent additional gas supplies to the European market - Russia. However, the leaders of these countries prefer not to think about it. On the contrary, they consider it possible to reproach us for “unreliability”. Are we refusing to deliver? We are ready to supply and supply within the framework of contracts the entire volume. We deliver the entire volume within the framework of contracts. But if someone does not want to take our product, what do we have to do with it? It's your decision.
He noted many times that the Nord Streams are devoid of any political background. These are purely commercial projects in which Russian and European companies participate on an equal footing, which means that Russia and our partners in the European Union should jointly decide the fate of the “streams”.
I will say that it is, of course, possible to repair gas pipelines that run along the bottom of the Baltic Sea and have been blown up. But this will make sense only in the case of their further economically justified operation, and, of course, when ensuring the safety of routes, this is a paramount condition.
If the Europeans and I come to a common decision to supply gas through the surviving branch - and there one branch of Nord Stream 2, apparently, has survived ... Unfortunately, we are not allowed to examine this branch, but pressure stored in the pipe. Maybe it is somehow damaged, we do not know this, because, as I said, they are not allowed to be examined, but the pressure remains, which means, apparently, it is in working condition. Its capacity is 27.5 billion cubic meters per year, which is about eight percent of all gas imports in Europe.
Russia is ready to start such deliveries. The ball, as they say, is on the side of the European Union. If they want, let them just open the tap, and that's it. I repeat, we are not restricting anyone in anything, and we are ready to supply additional volumes in the autumn-winter period.
More than once, including from the rostrum of the Russian Energy Week, they spoke about the causes and nature of the crisis that is developing in the European market, including the excessive enthusiasm for renewable energy sources to the detriment of hydrocarbons. Of course, it is necessary to deal with alternative types of energy - both the Sun, and wind, and tidal energy, and hydrogen. Of course, we need to do all this, but we need to do it in accordance with the volume of consumption today, with the growth rates of the world economy, with the needs for energy resources and with the level of technology development. But who does it, looking ahead, for political reasons, especially of an opportunistic domestic political nature? And so they did - here is the result now. The curtailment of nuclear energy is in the same row, as well as the rejection of long-term contracts in the gas sector and the transition to stock quotes.
By the way, according to expert estimates, this year alone, the spot gas pricing mechanism will bring losses to Europe in the amount of more than 300 billion euros, or about two percent of the eurozone's GDP. They could have been avoided if long-term oil-pegged contracts had been used. The professionals all sit here and understand what I'm talking about: the difference between the spot market and prices for long-term contracts is three, four times. And who did it? Are we? They did it themselves. In fact, they imposed this way of trading on us. Simply, in fact, they forced Gazprom to switch, in part, to pegging to the spot market, and now they are groaning. Well, it's their own fault.
It is clear how this problem with prices will be solved if they are high. We went through this in relation to other product groups: they just print money - that's all. In the last year alone, the money supply in the EU has grown by about a trillion euros. But the problem is, what will Europe do with this money? It will - just like other goods, including food - will also rake up gas from the world market. Consequently, other countries, primarily developing countries, will have to overpay for these energy resources.
The resource that comes to the European market is literally sold at exorbitant prices, as I have already said, and drives up inflation along the chain – it has already reached ten percent in the eurozone. Ordinary Europeans are suffering: in a year, their electricity and gas bills have more than tripled. The population, as in the Middle Ages, began to stock up on firewood for the winter.
What does Russia have to do with it? They are constantly trying to blame their own mistakes on someone, in this case, on Russia. We are to blame - I want to emphasize again. This is not even the result of any actions within the framework of a special military operation in Ukraine, in the Donbass - not at all. This is the result of misguided energy policies over a number of previous years. A whole series of years!
Rising costs are hurting local businesses. For some types of products, the rate of decline in output is measured in double digits. Deprived of affordable energy resources from Russia, European business is forced to close or seek a better share in foreign jurisdictions. This process is underway.
I can't help but point out some statistics here. According to the Europeans themselves, according to the EU, exports to Russia for 2021 amounted to 89.3 billion euros, and imports from Russia - 162.5 billion euros. The deficit in favor of Russia is 73.2 billion euros. This is in 2021. And in the first months of this year, this deficit increased to 103.2 billion euros.
What is the reason? We sell our goods, we are ready to buy European goods, but they do not sell themselves. They imposed an embargo on one commodity group, on the second, on the third - hence the deficit. What are we doing here? They will blame us again. We sell what they want to buy at market prices - please. We are ready to buy from you, but you do not sell. The deficit is growing and, I repeat, it is not at all our fault. There is no need to refuse cooperation with Russia - that's all.
What else I would like to note – in fact, this is now being emphasized by the highest-level European officials themselves – is that European prosperity in recent decades has been largely based on cooperation with Russia.
The consequences of the partial rejection of goods from Russia are already negatively affecting the economy and the inhabitants of Europe. However, instead of working to regain competitive advantage, their own competitive advantage in the form of cheap and reliable Russian energy, the eurozone countries are only making things worse. Including decided to limit the price of oil and oil products from our country. But these are not only the countries of Europe, but together with North America they are doing this, and, as planned, since December of this year.
In this regard, I will quote the American economist, Nobel Prize winner Milton Friedman: “If you want to create a shortage, for example, of tomatoes, then you just need to pass a law according to which retailers cannot sell tomatoes for more than two cents per pound. You will immediately get a shortage of tomatoes. It's the same with oil or gas,” end of quote. Let me remind you that Milton Friedman passed away in 2006. He had nothing to do with the Russian Government and certainly cannot be listed as an agent of Russia's influence.
It would seem that these are common truths. But the leaders of some countries, its bureaucratic elite brush aside these obvious considerations, on someone else's command, they deliberately lead a course towards the de-industrialization of their countries, towards a decrease in the quality of life of citizens, which, of course, will entail irreversible consequences.
You need to clearly understand: if you limit the price of oil from Russia or other countries, set some artificial price ceilings, then this will inevitably worsen the investment climate in the entire world energy sector, then provoke an increase in the global shortage of energy resources and a further increase in their cost, and this, I repeat, hit the poorest countries first. These inevitable consequences are absolutely obvious. And experts, including world-class experts – I just quoted a quote – talk about this all the time.
No intervention or unpacking of oil reserves will fix the situation. There are simply no free resources in the required volumes - that's what it's all about. You have to understand it in the end.
The fact is that due to the aggressive promotion of the “green” agenda, which, of course, needs support, as I said, but it’s just smart to do all this, and when it comes to the aggressive promotion of this agenda, including in the eurozone, the global oil and gas sector is already underinvested. Already! At the same time, EU and US sanctions were imposed against the leading oil producers - and this is about 20 percent of the world industry.
As a result, in 2020-2021, investments in oil and gas production dropped to the lowest levels over the past 15 years. You see, in 2020 and 2021, long before the start of our special operation in the Donbass. And these investments turned out to be more than two times lower than in 2014, due to the actions of the so-called Western politicians, and business did not invest 2.5 trillion dollars. I will say more about this later: what does the OPEC plus decision have to do with it? The OPEC Plus solution is aimed solely at balancing the global market. Found another extreme - OPEC Plus. Why this is here is not clear. That is, it is clear that they simply, I repeat once again, cover up their own mistakes, try to cover up. I will say two more words about this.
I will note one more important point. Suppose, as I have already said, the notorious ceiling on oil prices will be introduced. But who can guarantee that the same ceiling will not be set in other sectors of the economy - in agriculture, in the production of semiconductors, fertilizers, in metallurgy, and not only in relation to Russia, but also to any other country in the world? No one will give such guarantees, which means that with their adventurous decisions, some Western politicians are destroying the global market economy, in fact, posing a threat to the well-being of billions of people.
The so-called neo-liberal ideologists of the West already have experience of destroying traditional values, we all see it. Now, apparently, they have taken up the freedom of enterprise and private initiative.
Russia always fulfills its obligations, as I have already said. In this we are fundamentally different from the Western states, which cynically refused to fulfill the previously concluded contracts in the financial and technological spheres, in the supply and maintenance of equipment.
I will say one thing - Russia will not act contrary to common sense, to pay for someone else's well-being at its own expense. We will not supply energy resources to those countries that will limit their prices. To those who, instead of business partnerships and market mechanisms, prefer cheating tricks and shameless blackmail – and we have been living in such a paradigm in the political sphere for decades – I want to say that we will not act to our own detriment, keep in mind.
Our principled position is that stability, a balanced energy market and a secure future for peoples can only be ensured by joint efforts in an open, honest dialogue based on the principles of joint responsibility and consideration of each other's national interests.
This is the kind of dialogue we have established with our partners under the OPEC Plus agreement, which I have just mentioned. As you know, yet another agreement was reached within the framework of this agreement. They take into account, first of all, the dynamics of supply and demand for oil, as well as long-term investment programs in the oil industry, which, as I have already said, is objectively underfunded.
In October, the oil production quota in our countries will remain at the level of August this year, and then will be reduced by two million barrels per day. We hope that these decisions will suit both oil producers and consumers. At the same time, the coordination of the actions of the OPEC Plus partners will certainly continue to ensure stability and predictability of the market. Experts understand that the issue of predictability is absolutely key.
Dear colleagues!
Russia is one of the key participants in the global energy market. In terms of production and export of oil and gas, in terms of electricity generation and coal mining, our country is among the world leaders.
Despite the sanctions pressure and sabotage of the infrastructure, we do not intend to give up our positions. We will continue to ensure stable energy security and develop ties with those countries that are interested in this.
The volume of oil production in Russia has already overcome the decline and is even slightly higher than last year. We plan that on the horizon of 2025, the total volume of oil exports, as well as the volume of oil production in our country, will remain approximately at the current level.
What would be noted here. In recent decades, Russian oil production has become largely dependent on foreign equipment and services, but by 2025 we plan to increase the share of domestic equipment in the industry to 80 percent. Thus, despite the withdrawal of Western companies from the Russian market (they only make it worse for themselves), we will be able to ensure oil production in the required volumes.
As for Russian gas, we will certainly place our goods on world markets. Such projects as Power of Siberia and Turkish Stream are confirming their effectiveness. We have an effect on Turkey, for the domestic Turkish market, and Blue Stream. 14 billion cubic meters of gas are now being transited to Europe via Turkish Stream. Not that big, but decent.
What would you like to say in this regard? We could move the lost volume of transit through Nord Stream along the bottom of the Baltic Sea to the Black Sea region and thus make the main routes for the supply of our fuel, our natural gas to Europe through Turkey, creating in Turkey the largest gas hub for Europe, if, Of course, our partners are interested in this. But in general, of course, there is economic feasibility, and the level of security here, judging by recent events, is, of course, much higher.
Adds and high-tech segment of liquefied natural gas. Its production in Russia increased by almost 60 percent in August. In particular, the unique Yamal LNG plant located in the Arctic latitudes is successfully operating. Our systemic measures to develop the resource base of the Arctic, to develop the Northern Sea Route and the transport and icebreaking fleet are yielding results.
We will continue to increase energy exports to fast-growing markets. And of course, we intend to expand the geography of our deliveries. In the near future, we will identify key infrastructure facilities for this and begin their construction, including such promising projects as the Power of Siberia-2 and its Mongolian section Soyuz Vostok, as well as connecting the Asian and European segments of the national gas transmission system. We will continue to support LNG terminal projects. All strategic and extremely specific tasks in this area have been set before the Government of Russia. I'm sure they will be resolved.
We will also continue the transition to settlements in national currencies when delivering Russian energy resources. I already mentioned one such example: Gazprom and its Chinese partners decided to switch to the ruble and yuan in equal proportions when paying for gas supplies. Some European partners, as you also know very well, have also switched to paying for our gas in the Russian national currency, in rubles.
Dear colleagues!
Undoubtedly, Russia has been and will be one of the largest participants in the global energy market. But our key task is to ensure that the domestic fuel and energy complex works for the national economy, first of all, to increase its competitiveness, to develop and improve our regions, cities, towns, to improve the quality of life of our citizens.
A separate, strategic direction is to increase the volume of processing of raw materials. We are already implementing large-scale plans in this area, including projects in the Far East to develop large- and small-scale oil and gas chemistry. In the coming years, the number of such projects will increase markedly.
The social gasification program is gaining momentum. We are talking about residential buildings in cities and villages where network gas is laid. As of the beginning of October, gas has already been supplied to the land plots of more than three hundred thousand households.
At the same time, for many citizens, the cost of gas equipment and work inside the site is a serious burden, a big burden on the family budget, we have also talked about this. First of all, we are talking about large families, veterans, the disabled, families with low incomes. We need to help them, we will do it. What is this about? I ask the regional authorities to ensure the provision of subsidies to needy citizens for the purchase of gas equipment and carrying out relevant work inside the sites. The amount of such a subsidy should be at least one hundred thousand rubles per connection.
I understand that different regions have different budget opportunities, so the provision of subsidies in subjects of the Federation with a low level of budgetary security will be supported by federal resources.
I ask the Government to keep under control the implementation of this measure of support for citizens, to assess whether additional steps are needed here.
Another new solution. We have already agreed to include schools in the program of social gasification, to bring networks to them. I think it would be right if the Government, together with Gazprom, makes a similar decision in the near future with regard to medical organizations - polyclinics, hospitals, first-aid stations.
Thus, the key social facilities for the territories - medical and educational - will receive a source of cheap and environmentally friendly energy, which is especially important for rural areas.
In general, taking into account the receipt of new applications from citizens, the expansion of the number of connected facilities, I ask the Government to extend the social gasification program beyond the horizon of 2022.
And further. Despite the difficult economic environment and external restrictions, the capacities of the Russian energy system continue to be upgraded. This year, facilities with a total volume of more than two thousand megawatts were commissioned and modernized.
Such a systematic approach makes it possible to maintain electricity prices in Russia at the lowest level in Europe. Let me remind you that in the EU countries this year alone they have increased several times.
Particular attention should be paid to improving the reliability of the power grid complex. For the regions where the situation is the most difficult, special programs have been developed this year, and I ask the Government to start implementing them as soon as possible.
Dear friends!
Modern global energy is faced with unprecedented challenges and problems. For many, many years, the world community has been driven into this situation by the short-sighted, erroneous actions of a number of Western countries - I have already said this and, it seems to me, quite convincingly.
The search for a constructive way out of the situation, of course, should become the subject of thorough, professional, depoliticized discussions, including at the venues of the Russian Energy Week.
I repeat: Russia is ready for a trusting partnership in the energy sector in the interests of the sustainable development of our countries and their reliable supply of affordable energy. And we know that this approach is shared by the vast majority of our partners and states of the world.
I would like to wish you successful work and thank you for your attention.
Thanks a lot. Good luck!
