Russia redirected deliveries of oil products from unfriendly states to Africa, Turkey and the Asia-Pacific countries. Energy Minister Nikolai Shulginov spoke about this in an interview with Izvestia at SPIEF. He also added that the agency expects to accelerate the implementation of the project to create a gas hub in Turkey. Oil production in the country, according to the minister, will noticeably decrease in 2023 due to the decision to voluntarily reduce production. But the price corridor for this fuel can be kept at $80 per barrel.

"We have made every effort to diversify supplies"
— Against the backdrop of sanctions, Russia last year was forced to stop gas supplies to unfriendly countries along a number of routes and reduce export volumes. What indicators can be expected this year for the production and export of this fuel?

• Gas production this year, of course, is declining, but we are guided by the forecasts that are provided for by the forecast for the socio-economic development of the country. And today, production figures are 8% lower than the values ​​included in this forecast . As for export, I would hesitate to give figures. If we divide pipeline and liquefied gas, then for liquefied gas we roughly focus on the numbers that are included in the forecast. This is an increase of 1-2 million tons, up to somewhere up to 32 million tons for LNG compared to 30 million tons last year.

• Additional restrictions are imposed by the West on the sale of Russian oil. How significant will the decline in oil production and export from Russia this year be?

• Among the factors that affect production figures are not only sanctions, but more even the obligations that Russia has assumed to voluntarily reduce. This is 500 thousand barrels per day . The decrease in oil production with condensate will be about 20 million tons compared to last year.

— To what extent did you manage to redirect oil exports to other countries? In which?

• In short, it worked very well.

— How difficult was it to diversify the market?

• It was not easy. Because the sanctions were constantly increasing in different directions: on payment systems, on the cost of freight, on the price ceiling - all this was reflected in the situation. But we made every effort to diversify these deliveries, and this task was completed . Of course, few people refuse high-quality oil products from Russia, except for Europe and America, so we had to redirect our supplies to African countries, Turkey , and the Asia-Pacific countries . Some countries have already significantly increased the purchase of our oil and oil products . And we continue to work on this topic.

— Recently, the Ministry of Finance came up with a proposal to cut damper payments to Russian oilmen by half. How do you rate this measure? And is there a risk of a rise in fuel prices if it is adopted?

• The measure is being discussed in the government until the document has left the walls of the Cabinet for its further submission to the State Duma. And the dates are therefore changing, previously it was called July 1, most likely, it will now be September 1. Of course, we understand that there are risks and underfunding in the industry, there is also the possibility of an increase in wholesale prices, and there will be pressure on retail and prices, but our task is to create all conditions so that prices, especially in retail, do not exceed inflation . This is where we see our task.

— And how balanced is the domestic market now? Indeed, against the background of a reduction in export supplies, an oversupply should develop on the domestic market, which, in turn, should pull prices down. Will we face an overabundance of fuel inside Russia?

• You need to constantly look after the balance, an overabundance is bad, like a deficit. Therefore, the task of the Ministry of Energy is precisely to regulate this : we constantly hold meetings with oilmen on the topic of rising wholesale prices and repairs at refineries in order to maintain a balance of supply and demand in the market.

— What oil and gas prices does the Ministry of Energy expect this year? Do you have some kind of predictable bar, based on which you build your work further?

​​​​​​​—Everyone likes to name some prices, but it is important for us that these prices suit the consumers who buy these products . And gas prices, for example, affect Russian consumers, the population. Therefore, we make sure that they are not indexed above inflation.

If we talk about oil prices, then every effort is also being made, including the concluded agreement on cooperation between OPEC and non-OPEC countries in order to balance this market . Therefore, it is better to deal with specific cases than just forecasts.

​​​​​​​—Is it real to keep prices in the $80 per barrel corridor?

• Yes really.

— In the energy sector, what projects does Russia currently have abroad? With whom are we already cooperating and what new projects are being prepared?

• There are many projects abroad. For example, we are currently working with African countries to update the list of projects on the eve of the Russia-Africa summit, where it will be possible to propose projects on oil and gas, energy and the construction of hydropower plants. As for the well-known topics, this is an increase in gas supplies through the Power of Siberia to 22 billion from the previous 15 billion. An intergovernmental agreement was signed on the Far Eastern route for deliveries of 10 billion a year . And on June 13, our president already signed the law on the ratification of this agreement. This is work on the "Power of Siberia 2", including "Soyuz Vostok" on the territory of Mongolia, this is work with Pakistan on deliveries .

We are working on large-scale projects , as well as with each country and on other projects. There is a project, for example, a gas hub in Turkey. This is a new project , probably will be its acceleration.

• In this regard, what do you expect from the upcoming meeting between the presidents of Russia and Turkey - Putin and Erdogan? The Kremlin confirmed today that the talks will take place.

​​​​​​​—I think that there will be some kind of push, because there was a tragedy associated with an earthquake, there was no time for discussion . Today the issue, I think, will reach a new level, including the creation of a gas hub.

What will happen to the LNG market? The demand for liquefied natural gas is growing more and more, and we need a fleet for this.

​​​​​​​—Yes, we need equipment for the production of LNG. NOVATEK is active, and not only in light-duty equipment . Today they have plans to develop their own production, equipment based on our technology, and this is precisely the ambitious task set. By 2030, it is necessary to produce 100 million tons, and by 2035 - already 120 million . But we still need some kind of stimulation in order to intensify this work even more.

• In what form, what should it be? Additional investment?

— I think it’s more about tax support, relief, and so on .

​​​​​​​—On April 25, President Vladimir Putin signed a decree on external management in the structures of foreign companies. What foreign assets in the Russian Federation can be transferred under external management following the example of Fortum and Unipro?

​​​​​​​— This is a mirror response to the actions of unfriendly countries in relation to our property, our property, and so on. Therefore, today the Federal Property Management Agency has introduced temporary management of the shares of these companies in Unipro and Fortum companies . These are important facilities​​​​​—in general, two companies own 12 largest stations,​​​​​​​this is the energy security of the country . Therefore, we must respond, respond also to the fact that their control is in the hands of unfriendly countries. There are no proposals for other companies yet , but if the president sees that other countries are acting unfriendly towards us, he will probably supplement the decree.

• Against the backdrop of all the recent events related to sanctions, the question arises, do we really need the presence of foreigners in the domestic energy market and is it time to revise the rules for participation?

​​​​​​​— Here we need to turn to the reform of the energy sector, how did our generation facilities get into ownership. These were also established laws, the market, these were investments in our market, and this cannot be reconsidered instantly. Now we need to keep an eye on this, because actions towards us are sometimes absolutely unfriendly. So far, in general, foreign players are behaving carefully, and the facilities themselves are working reliably in terms of supplying electricity and heat. But we do not know what they will throw out in the next moment.

“We do not have the task of simply distributing state property as quickly as possible”

"Government's task is to find priorities"
— This year, quite serious jumps in gasoline prices were observed in the wholesale market, in retail, the cost of fuel at filling stations also increased in a number of regions. The Ministry of Energy is monitoring this process, does it plan to get involved somehow, to regulate prices, or do you have a clear confidence that they will not rise above inflation?

• This confidence should be based on control. We carry out weekly monitoring of wholesale prices, broadcasting them down, watching the process together with the Federal Antimonopoly Service and even trying to increase the volume of fuel sales on the stock exchange .

When can this measure be taken?

​​​​​​​— While this proposal is being discussed on the percentage increase in trading. Together with the Federal Antimonopoly Service, we make sure that there are no manipulations associated with an increase in export sales of those petroleum products that were purchased with a damper and so on . That is, we do not prohibit exports, but we control and monitor this , issue a proposal to increase the volume. At the end of June, repairs are already being completed at the main refineries. I think the situation will also be more or less stable and predictable.

Costs are rising for all companies for obvious reasons, including energy companies. Will it be possible to keep prices, primarily for the population and for industrial large consumers, within the framework of inflation for the same gas, electricity, heat?

The gas price is regulated by the state. And the price for the population is always lower than for industry . This is the state's position. The same policy applies to tariffs and prices in the electric power industry. Therefore, the state indexes gas prices and tariffs for transit through gas distribution networks, but taking into account even lower than inflation . For example, last year the price indexation for gas was 8.5%, while inflation was 11.9%, for electricity 9% .

Of course, in the energy sector, the rise in prices for raw materials, metals, materials should be reflected in tariffs, but sometimes you have to work within a stricter framework and, including energy companies, to restrain the rise in prices for consumers .

​​​​​​​—What is happening with the investment programs of energy companies? After all, business always reduces costs through investments, for example, in the modernization of equipment. But first of all, this may affect the safety of facilities, the accident rate may increase, for example, at power plants it has increased markedly. To what extent do companies manage, in your opinion, to keep their facilities in proper condition?

• This is also our task. In fact, we saw that in the past autumn-winter period, the accident rate at power plants increased . This is connected, of course, with increased output at stations, especially in Siberia and the Far East . We are watching this, investments, of course, are needed, we need to improve reliability, energy security, including the entire unified energy system . ​​

• Does the state help companies find the missing investments or do they cope on their own?

• This is a common task, as well as the task of the government - to find priorities. But investments are no longer a budget, but a tariff component . We very rarely turn to budgetary sources, we try to live on the basis of the search for internal reserves and internal privatization.

• This article originally appeared in Russian at https://iz.ru/