Putin's Russian Energy Week Speech

The machine translation of the Russian transcript is rough, but I made no attempt to smooth it. There's also a video of the speech at the link. Putin refuses to name names, but most know what nation he's talking about.

President of Russia Vladimir Putin: Good afternoon, dear friends, ladies and gentlemen,

I welcome the participants and guests of the Russian Energy Week, a recognized and authoritative platform for dialogue on key topics of global energy.

Such direct, open communication is especially necessary now, when the global economy as a whole and the fuel and energy sector are experiencing, frankly, an acute crisis associated with the unstable price dynamics of energy resources, the imbalance of supply and demand, as well as with the frankly subversive actions of individual market participants who are guided solely by their own geopolitical ambitions, resort to outright discrimination in the market, and if it does not work, simply destroy the infrastructure of competitors.

In this case, I am referring, of course, to 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 aimed at undermining the energy security of an entire continent. The logic is cynical – to destroy, block the sources of cheap energy, to deprive millions of people, industrial consumers of gas, heat, electricity, and other resources and force them to buy all this at much higher prices. Compel.

The attack on Nord Streams has become a dangerous precedent. It shows that any critically important object of transport, energy or communication infrastructure is now under threat, regardless of where in the world it is located, by whom it is managed, laid on the seabed or on land, on land.

This was confirmed – I do not want to talk about it, we are at the [Russian] Energy Week, it seems that we are 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 a confirmation of this. I have already said that the regime in Kiev has long been using terrorist methods, organizing political assassinations, ethnic cleansing, massacres of civilians. Then they put it on the Internet themselves – they realize that they have made a mistake – they immediately erase it. But still in the network everything remains. They do not stop at nuclear terrorism, I mean the shelling of the Zaporizhzhya nuclear power plant, and the commission of terrorist attacks around the Kursk nuclear power plant in Russia. In this series, of course, there are attempts to undermine the Turkish Stream gas pipeline.

Let me repeat: all the facts have been proven and documented, and the ideologists and instigators of these crimes are their ultimate beneficiaries, the beneficiaries – those who benefit from instability and conflicts.

And who is behind the sabotage on Nord Streams? Obviously, those who seek to finally sever ties between Russia and the European Union want to finally undermine and finish off the political subjectivity of Europe, weaken its industrial potential, and take over the market. And of course, someone who is technically – I want to emphasise this – is technically capable of arranging such explosions and has already resorted to such sabotage, and was caught by the hand, but went 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 for its own money. And also the United States, of course, which can now supply energy resources at high prices.

As decent companies say, highly likely, everything is clear, everything is clear, who is behind it and who is the beneficiary.

It is now possible, indeed, to impose on European countries on a large scale natural liquefied gas from the United States, which is clearly inferior in competitiveness to Russian pipeline gas. After all, the prices for American LNG are much higher, this was well known to everyone before, and now even more so, but there are additional risks, in addition to price indicators. The risks are that all this is very unstable and any supplies can "float away" to other regions of the world. And we've seen that, by the way, and just recently, when U.S. tankers carrying LNG to Europe were turning around halfway and changing destinations because LNG sellers were offered a higher price elsewhere. At the same time, the interests of European buyers were ignored.

I would also like to remind you who came to Europe's aid at that time and sent additional gas supplies to the European market – Russia. However, the leaders of these countries prefer not to remember this. On the contrary, they consider it possible to reproach us for "unreliability". Are we refusing to supply? We are ready to supply and supply the entire volume within the framework of contracts. We supply the entire volume within the framework of the contracts. But if someone doesn't want to take our product, what do we have to do with it? It's your decision.

I have noted many times that 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 the fate of the "flows" should be decided jointly by Russia and our partners in the EU countries.

I will say that it is certainly possible to repair gas pipelines running along the bottom of the Baltic Sea and undermined. 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 we come to a common decision with the Europeans to supply gas through the surviving branch – and there one branch of Nord Stream 2, apparently, survived ... Unfortunately, we are not allowed to inspect this branch, but the pressure in the pipe remains. Maybe it is somehow damaged, we do not know this, because they are not allowed, as I said, to be examined, but the pressure remains, which means, apparently, it is in working order. 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 in the EU's court. If they want to, let them just open the tap and that's it. I repeat that we are not restricting anyone in anything, including the need to supply additional volumes in the autumn and winter period.

More than once, including from the rostrum of the Russian Energy Week, we talked about the causes and nature of the crisis that is developing in the European market, including excessive enthusiasm for renewable energy sources to the detriment of hydrocarbons. Of course, it is necessary to deal with alternative types of energy – the Sun, the wind, the energy of the tide, and hydrogen. Of course, we need to do all this, but we need to do it in accordance with the volume of consumption today, the growth rate of the global economy, the need for energy resources and the level of technology development. But who is doing, looking ahead, for political reasons, especially opportunistic domestic political ones? And that's what they did – here's the result now. The curtailment of nuclear energy in the same series, as well as the rejection of long-term contracts in the gas sector and the transition to exchange quotations.

By the way, according to expert estimates, only this year 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-linked contracts had been used. Here, professionals all sit and understand what I am 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 such a way of trading on us. Simply, in fact, they forced Gazprom to switch partly to a link to the spot market, and now they are cooling down. 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 and that's it. In the last year alone, the money supply in the EU has grown by about a trillion euros. But the problem is that What will Europe do with this money? It will – just like other goods, including food products – it will rake 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 sold literally at a triple price, as I have already said, and rocks inflation along the chain – in the eurozone it has already reached ten percent. 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 this? They are constantly trying to blame their own mistakes on someone, in this case on Russia. We are to blame ourselves – I want to stress it again. This is not even the result of any actions within the framework of a special military operation in Ukraine, in donbass – not at all. This is the result of misguided energy policies over a number of previous years. A number of years!

Rising costs are undermining local businesses. For some products, the rate of decline in output is measured in double digits. Deprived of available energy resources from Russia, European business is forced to close or look for a better share in foreign jurisdictions. This process is underway.

I cannot fail to mention some statistics here. According to the Europeans themselves, according to the EU, exports to Russia in 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. That's in 2021. And in the first months of this year, this deficit increased to 103.2 billion euros.

Why? 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 do we have to do with this? They're going to 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 our fault at all. There is no need to refuse to cooperate with Russia – that's all.

I would also like to note – as a matter of fact, the highest-level European officials themselves are now stressing – that the European well-being of recent decades has largely been based on cooperation with Russia.

The consequences of a partial rejection of goods from Russia are already having a negative impact on the economy and residents of Europe. However, instead of working to regain competitive advantages, their own competitive advantages in the form of cheap and reliable Russian energy, the eurozone countries are only exacerbating the situation. In particular, we decided to limit the price of oil and oil products from our country. But these are not only European countries, but together with North America they are doing this, and, as planned, from 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 can no longer be recorded as an agent of influence of Russia.

It would seem that these are truisms. But the leaders of some countries, its bureaucratic elite dismiss these obvious considerations, and, on someone else's command, are deliberately pursuing a policy of deindustrializing their countries, reducing the quality of life of citizens, which will certainly entail irreversible consequences.

It should be clearly understood that if the price of oil from Russia or other countries is limited, if some artificial price ceilings are set, this will inevitably worsen the investment climate in the entire global energy sector, then provoke an increase in the global shortage of energy resources and a further increase in their cost, and this, I repeat, will hit primarily the poorest countries. These inevitable consequences are absolutely obvious. And experts, including world-class ones – I just gave you a quote – talk about this all the time.

No amount of intervention or the unsealing of oil reserves will remedy the situation. There are simply no free resources in the required volumes – that's the whole point. We need to understand this in the end.

The fact is that due to the aggressive promotion of the green agenda, which, of course, needs support, as I have already said, but all this must be done wisely, and when it comes to aggressive promotion of this agenda, including in the eurozone, the global oil and gas sector has already been underinvested. Already have! At the same time, EU and US sanctions were imposed against the leading oil producers – and this is about 20 percent of the global industry.

As a result, in 2020-2021, investments in oil and gas production fell to minimum levels over the past 15 years. You see, in 2020 and 2021, long before the start of our special operation in Donbass. And these investments turned out to be more than two times lower than in 2014, due to the actions of so-called Western politicians, and business underinvested $ 2.5 trillion. I'll talk about this later: what does the OPEC Plus decision have to do with this? The decision of "OPEC Plus" is aimed solely at balancing the world market. We found another last one – "OPEC Plus". What this has to do with this is not clear. In other words, it is clear that they cover up their own mistakes, I repeat, and try to cover them up. I'll say a few more words about that.

I would like to note one more important point. Suppose, as I have already said, the notorious ceiling on oil prices will be introduced. But who will 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 in 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, creating a threat to the well-being of billions of people.

The so-called neoliberal ideologists of the West already have experience of destroying traditional values, we all see it. Now, apparently, they have taken up the freedom of entrepreneurship and private initiative.

Russia always fulfils its obligations, as I have already said. This is a fundamental difference between Western countries, which cynically refused to fulfill 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 limit their prices. To those who prefer cheating tricks and shameless blackmail instead of business partnership and market mechanisms – and we have been living in this 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, balanced energy markets and a secure future for peoples can be ensured only through 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, as I have just mentioned. As you know, we have recently reached further agreements 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 of the oil industry, which, as I have already said, is objectively underfunded.

In October, the quota for oil production in our countries will remain at the level of August of this year, and then it 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 the 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 oil and gas production and exports, electricity generation and coal production, our country is among the world leaders.

Despite the sanctions pressure and sabotage on 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 I would like to note here. In recent decades, Russian oil production has been 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 themselves worse), 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 the Power of Siberia and the Turkish Stream confirm their effectiveness. We also have Blue Stream in Turkey, for the domestic Turkish market. The Turkish Stream now transits 14 billion cubic meters of gas to Europe. Not that much volume, but decent.

What would I like to say in this regard? We could move the lost volume of transit via Nord Streams along the bottom of the Baltic Sea to the Black Sea region and thus make it 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, there is economic feasibility, of course, and the level of security here, judging by recent events, is certainly much higher.

The high-tech segment of liquefied natural gas is also adding. Its production in Russia in August increased by almost 60 percent. 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 icebreaker 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 supplies. In the near future, we will identify key infrastructure facilities for this purpose and begin their construction, including such promising projects as power of Siberia-2 and its Mongolian section Soyuz Vostok, as well as the docking of 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 for the Russian Government. I am sure they will be resolved.

We will also continue the transition to settlements in national currencies for the supply of Russian energy resources. One of such examples has already been mentioned: Gazprom and its Chinese partners decided to switch to the ruble and the yuan in equal proportions when paying for gas supplies. Some European partners, as you are also well aware, have also switched to paying for our gas in Russian national currency, in rubles.

Dear colleagues!

Of course, 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 sector works for the national economy, first of all, to increase its competitiveness, to develop and improve the improvement of our regions, cities and towns, and 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 in the Far East, projects have been launched to develop large- and low-tonnage oil and gas chemistry. In the coming years, the number of such projects will grow significantly.

The program of social gasification is gaining momentum. We are talking about residential buildings in cities and villages, where network gas is laid. At the beginning of October, gas has already been brought 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 great burden on the family budget, we have already talked about this. First of all, we are talking about large families, veterans, people with disabilities, families with low incomes. We definitely need to help them, we will do it. What are we talking about? I ask the regional authorities to ensure the provision of subsidies to needy citizens for the purchase of gas equipment and the implementation of appropriate work inside the sites. The size of such a subsidy should be at least one hundred thousand rubles per connection.

I understand that the budget opportunities of different regions are different, so the provision of subsidies in the regions with a low level of budget security will be supported by federal resources.

I ask the Government to monitor the implementation of this measure to support citizens and assess whether additional steps are needed here.

Another new solution. We have already agreed to include schools in the social gasification programme and bring networks to them. I think it would be right if in the near future the Government, together with Gazprom, makes a similar decision with regard to medical organisations – polyclinics, hospitals and FAPs.

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 and the expansion of the number of connected facilities, I ask the Government to extend the social gasification programme beyond the horizon of 2022.

One more thing. Despite the difficult economic situation, external restrictions, the capacity of the Russian energy system continues to be updated. This year, facilities with a total volume of more than two thousand megawatts were commissioned and modernized.

Such a systematic approach allows us to maintain electricity prices in Russia at the lowest level in Europe. Let me remind you that in the EU countries only this year they have grown several times.

Particular attention should be paid to improving the reliability of the electric grid complex. For the regions where the situation is the most difficult, special programmes 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 international community has been driven into this situation by the short-sighted and erroneous actions of a number of Western countries – as I have already said, and I think it is quite convincing.

The search for a constructive way out of the situation, of course, should be the subject of thorough, professional, depoliticised 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 overwhelming majority of our partners and the countries of the world.

I want to wish you successful work and thank you for your attention.

Thank you very much. Best regards!