Beginning of the meeting with with Viktor Vekselberg, member of TNK-BP's Board of Directors and chairman of the Supervisory Committee of the Renova Group Companies 2008-10-03 19:40:43 The Kremlin, Moscow President of Russia Dmitry Medvedev: Viktor Feliksovich, let's start with the major infrastructure projects and the social projects that your team is involved in. I am referring to a housing project that you have long been developing, the Akademichesky housing project. How is work proceeding in light of the fact that today there is complex situation surrounding financing? How is the situation: are facilities already being used and what remains to be done? MEMBER OF TNK-BP’S BOARD OF DIRECTORS AND CHAIRMAN OF THE SUPERVISORY COMMITTEE OF THE RENOVA GROUP COMPANIES VIKTOR VEKSELBERG: Thank you Dmitry Anatolyevich for the opportunity to provide you with information on the implementation of this project and to share its problems and partial successes — I am not afraid of the word. The Akademichesky housing project was organised by the Renova group companies as a comprehensive project to be carried out on a public-private partnership basis in 2006. The project is unprecedented in Russia and in Europe as well: it is one of the largest existing housing projects. In fact, the group’s task is to build a 21st-century city in conjunction with the federal and regional authorities. The challenge is very ambitious but I want to tell you that we are coping well despite the complexities and challenges of today's world, the issues surrounding financing, and the problems in the stock market. I think that one of the main reasons behind the project’s success is that it is being carried out on a public-private partnership basis. <…> The total area of housing is 9 million square metres and then 4.5 million square metres for commercial and social use. Dmitry Medvedev: And along with this there will be a new area of 325 thousand people. Viktor Vekselberg: In fact, this will be a new city. New jobs are being created, we estimate jobs for about 100 thousand people. <…> Dmitry Medvedev: But is there a demand for these facilities? Viktor Vekselberg: Of course there is, otherwise we would not have built it. Dmitry Medvedev: That is the most important thing. Because after all it must still operate under the laws of the housing market. Good. Thank you for the report. Now there’s another thing that I want you to clarify. The corporate conflict within the group TNK-BP has lasted long enough. Its knock-on effects have been felt in many different places. I have been asked about it by our colleagues, including British ones. How are things now, did you manage to settle the conflict? Our position has always been that the state should not get involved in such corporate conflicts, but given its magnitude I would like you to tell me more. Viktor Vekselberg: It's true Dmitry Anatolyevich that during a certain period there was a conflict between the company’s shareholders associated with their different views as to the company’s strategic priorities. But I want to report to you that we have been able to reach an agreement with our British colleagues. A memorandum of understanding that sets out the basic principles for the company’s future development, which in fact will make the company more independent, has been signed. An independent manager must head the company. Independent directors will sit on the board of directors. We agreed on the company’s strategic priorities and the main one is that the company is a Russian corporate citizen and carries out its activities in accordance above all with the interests of the country in which it is located. The agreements are currently being translated into legal documents. I think that in light of current plans we will have completed all these procedures by December. Last week we held the so-called town hall where the leadership, British Petroleum, and Russian shareholders met with company employees. We talked publicly about what is happening. I think that the situation is stable. The company itself is working well. We have implemented all of our plans. I would say that in October we will complete the first phase involving the exploitation of the Verkhnechonsk field. This is in the north of the Irkutsk Region. And the company will connect to the section of the Eastern Siberia-Pacific Ocean Pipeline that has already been completed. We and our partners will deliver oil. Dmitry Medvedev: Very good. The main thing is that all this has ended peacefully, quietly, and that the company can grow further. Of course it is in the interests of shareholders and of the entire nation that the company continues to grow, generate additional jobs and create a profit.