In a meeting today with top government officials, including Deputy Prime Minister Alexander Novak, and the Ministers of Natural Resources and Environment, Industry and Trade, Economic Development, Energy, as well as many others, President Vladimir presented plans for upgrading and reorganizing Russia’s oil and gas industry, with an eye toward redirecting exports away from the West to the South and East (the Asia-Pacific, Africa, and Ibero-America) and resolving problems of logistics exacerbated by Western sanctions and cut-off/reduction of Russian oil and gas purchases.
In opening remarks, Putin emphasized the importance of long-term development plans and dealing with the disruption of export logistics. A key goal, he said, is to convert payments for energy resources into national currencies, “and to gradually depart from dollars and euros. In general, we intend to drastically increase the share of settlements in national currencies in our foreign trade system.” Thus, the currency market must be prepared for this transition. A strategic goal for Russia’s financial and economic security is to “give up unreliable, compromised currencies and jurisdictions.”
The Russian President identified three immediate goals: 1) ensure sustainable energy supplies for the domestic market and increase supplies to Russian consumers; 2) diversify exports; energy supplies to the West will continue to drop, so it will be important to “redirect our exports gradually to the rapidly growing markets of the South and East"—the Asia-Pacific, Africa, and Ibero-America are all promising markets for expansion—and build the railways, ports, and pipelines to facilitate this; 3) develop deep processing of oil and gas. Progress has been made in this area, but now additional support must be provided for investment-stage projects to put them into production as soon as possible. Special attention must be paid to import substitution for oil and gas production equipment.
Putin pointed to certain ironies of the current situation. Partners from unfriendly countries admit that they can’t do without Russian energy resources. Deliveries from other countries— i.e., the U.S.— to Europe will be hugely expensive and will negatively affect people’s living standards and the competitiveness of the European economy. Yet, European countries are vowing to abandon Russian gas supplies. And, he observed, the green agenda has been abandoned, and now countries are going back to those “dirty” fuels with the big carbon footprint they had been so anxious to scrap. Experts had warned that an accelerated green transition would incur major losses, Putin pointed out, adding that “this has just happened in reality,” but now they have a “wonderful excuse to cover up their own miscalculations and blame everything on Russia.”
