WEBVTT

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Can I ask you about the Chinese again.

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Back in 2013 you said you set $100 billion of trade with 

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China as a target for 2015.

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But it was about $67 billion-$70 billion a year.

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What went wrong? I know the problems to the ruble 

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and problems to the oil.

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Do you still think that target of $200 billion in 2020 is achievable?

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Yes, I find it absolutely attainable.

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You have just listed the causes of this fall in bilateral trade 

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yourself. At the first stage, we set the target at about 100 billion 

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US dollars, and we almost got there –

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it reached 90 billion. So we are almost there.

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But we also know the reasons for the fall.

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These include a decline in the prices of our traditional export goods 

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and the exchange rate difference.

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These are objective reasons. And you know that very well.

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Did sanctions make a difference?

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The sanctions have nothing to do with our relations with China,

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because our relations with the People's Republic of China are 

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at an unprecedented high both in terms of their level and substance.

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They are what we call ”a comprehensive partnership 

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and strategic cooperation“. Sanctions have nothing to do with this.

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The decline in our mutual trade has objective causes,

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which are the energy prices and the exchange rate difference.

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But the physical volumes have not decreased,

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quite the opposite actually. They are growing.

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As to our trade and economic relations with China,

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they are growing more and more diverse each day,

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something we have worked on for a long time with our partners from 

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China. I would like to draw your attention to the fact that we have 

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gone from pure trade in traditional goods 

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(energy resources, such as hydrocarbons, oil and now natural gas,

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petrochemicals on the one hand and textiles and footwear on the other)

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to a whole new level of economic cooperation.

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For example, we are working together on space programmes.

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Moreover, we are developing and soon will begin 

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the production of a heavy helicopter.

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We are now tracing the plan for the creation of a wide-body 

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long-range aircraft.

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Russia and China also cooperate in mechanical engineering,

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high-speed railway transportation, lumber processing,

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nuclear energy production and so on.

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We have built the Tianwan Nuclear Power Plant.

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Two units are already operational and are showing good results.

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There are two more to go.

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So, the goal we have set for ourselves,

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which is to diversify our cooperation with China, is making progress.

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Can I ask you about the oil price — your favourite subject.

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Almost two years ago you said that if crude oil fell below $80 a barrel 

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there would be a collapse in oil production.

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The price is still below $50 and production hasn't stopped.

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Has your thinking changed on that at all?

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If I said that oil production would collapse I was wrong.

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By the way, I do not remember when I said this,

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maybe in the heat of the moment, but I do not think I even said it,

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but I may just not remember it.

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I was saying that at a certain level of oil prices new 

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deposits will not be explored. That is what is actually happening.

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However, surprisingly, our oil and gas workers 

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(mainly oilmen) continue to invest.

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Over the past year, oilmen have invested 1.

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5 trillion rubles, and if we take into account government investments 

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into the development of pipeline transport and electric energy,

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general investments into the energy sector were 3.

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5 trillion rubles last year. It is a considerable amount.

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Oil production, energy production are growing,

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though the latter has gone down by about 1 percent here,

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I believe… By the way, we occupy the first place in the world in gas 

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export, accounting for 20 percent of the world market.

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We are also first in the sphere of liquid hydrocarbons export.

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Though we still come first in the sphere of gas export,

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national production has diminished due to the increasing volumes 

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of hydrogenation for the electric power industry and therefore there is 

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a lower need for gas at thermal power plants.

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This is the result of the restructuring of the situation 

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at the national energy market.

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In general, Gazprom is doing well and is increasing export 

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in its traditional partner countries.

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You're going to talk to Saudi Deputy Crown Prince Mohammed 

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bin Salman at the G-20.

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Would you still be in favor of the production freeze if 

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the Saudis want that?

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As far as I know, Mr.

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Salman is deputy Crown Prince, but this is not so important.

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He is a very active statesman, we have really warm relations.

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This is a person who knows what he wants and can achieve his goals.

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At the same time I consider him to be a reliable partner with whom one 

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can negotiate and be sure that agreements with him will be implemented.

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However, it was not us who refused to freeze oil production;

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our Saudi partners changed their point of view at the last moment 

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and decided to slow down the adoption of this decision.

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I would like to reiterate our position,

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it remains the same. Firstly, in my conversation with Prince Salman 

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on this issue I will reiterate our position: we think that this is 

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the right decision for the world energy sector.

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Secondly, it is well known what we were arguing about: if we freeze oil 

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production, everybody should do so,

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including Iran. But we understand that the Iranian position is very bad 

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because of the well-known sanctions against that country,

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and it would be unfair to leave it on this sanction level.

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I believe that in fact it would be economically reasonable and logical 

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to reach a compromise, I am sure that everybody understands this.

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This issue is not economic but political.

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I hope that all market participants interested in maintaining stable 

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and reasonable world energy prices will finally make the right decision.

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So you would be in favor of a production freeze but giving Iran 

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a little bit of leeway to do what they need to do?

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Yes.

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Can I ask you about privatization and oil again? The privatization 

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of Bashneft – you've delayed it.

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And now as we reported Igor Sechin of Rosneft just come forward 

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and said he would like to buy the half of it for $5 billion.

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You have always said that you don't want for big state companies to be 

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buying the newly privatized ones. You wouldn't allow that, would you?

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You know, you have just mentioned state companies.

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Strictly speaking, Rosneft is not a company.

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Let us not forget that BP has a stake in Rosneft and BP is 

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a British company. You are a subject of the UK,

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are you not? It means that you also to a certain degree…

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You may have more control over Rosneft than Theresa May has over BP.

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We may have more control, but my point is that, strictly speaking,

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it is not a state company.

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I think that this is an obvious fact,

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as a foreign investor has a 19.7 percent stake in it.

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However, given the fact that the State has a controlling stake 

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in the company, it might not be the best course of action when one 

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company under State control buys another one fully owned 

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by the State. This is one point.

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Another point is that ultimately, as far as the budget is concerned,

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of major importance is who offers more money during the bidding that 

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must be organized as a part of the privatization process.

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In this sense, we cannot discriminate against any market participants,

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not one of them, but this is not relevant at the moment,

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as the Government has decided to postpone the privatization of Bashneft.

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That's gone. But on the question on privatization,

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you said back in 2012 that you wanted to expand privatization,

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you've had a difficult time on this.

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Why has that not worked? Is there a case,

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why does Russian government need to own 50 percent of these 

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companies? May be you could sell more?

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There is no need for the Russian state to hold such large stakes and we 

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do intend to put our plans into practice.

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It is not about whether we want it or not,

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it is about this being practical or not and the best timing.

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In general, it is practical from at least one point of view –

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from the point of view of structural changes in the economy.

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It is true that the role of the state in the Russian economy may be too 

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big today, but from the fiscal standpoint,

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it is not always practical to do this in a falling market.

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That is why we are careful, but our trend in the privatization process 

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and gradual withdrawal of the state from certain assets 

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remains unchanged.

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By the way, you have mentioned Rosneft.

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We are actively preparing a partial privatization of Rosneft itself.

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It is the best proof that our major plans have remained unchanged.

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Another example would be one of the largest Russian diamond 

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mining companies in the world.

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We are privatizing part of our stake in that as well.

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ALROSA?

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ALROSA. We are working in other areas as well,

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so there are no radical changes to our position.

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It is not the case when we have to, as we say,

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make a lot of fuss about it.

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In other words, we do not have to be obsessed with privatizing 

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immediately and at any cost. No,

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we will not do it at any cost.

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We will do it in a way that ensures maximum benefit 

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for the Russian state and the Russian economy.

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So you would do Rosneft this year,

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you would sell those shares in Rosneft this year you hope?

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We are getting ready for the deal this year.

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I do not know whether the Government will be able to get ready 

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to conduct this transaction together with the management of Rosneft 

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itself, whether the appropriate strategic investors will be found.

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And I believe it is about such investors that we should talk.

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But we are getting ready, and it is in the current year 

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that we are planning to do this.

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And do you, do you again just to push you on that 50 percent,

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would you be happy in a world where the Russian state had less than 50 

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percent of these big companies?

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We do not consider this disastrous at all.

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You know, I remember that when foreign shareholders, foreign investors,

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got 50 percent in one of our companies, I will not name it now,

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their contribution to the federal budget and tax payments increased 

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several times over at once and the company's efficiency did not 

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decrease. Therefore, in terms of the interests of the state,

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the ultimate interests of the state, in terms of its fiscal interests,

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we have a positive experience, most likely, not a negative one.

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Very quickly: the other accusation you've faced or heard a lot is 

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people connected with Russia or backed by Russia were the people who 

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hacked into the Democratic Party database.

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Is that, you would also say that is completely untrue?

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I know nothing. There are a lot of hackers today, you know,

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and they perform their work in such a filigreed and delicate manner 

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and they can show their “tracks” anywhere and anytime.

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It may not even be a track; they can cover their activity so that it 

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looks like hackers operating from other territories,

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from other countries.

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It is hard to check this activity,

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maybe not even possible.

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Anyway, we do not do that at the national level.

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Besides, does it really matter who hacked Mrs.

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Clinton’s election campaign team database? Does it? What really matters 

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is the content shown to the community.

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This is what the discussion should be held about.

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There is no need to distract the attention of the community from 

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the essence of the subject substituting it with secondary questions 

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dealing with the search of those who did it.

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I would like to repeat: I know absolutely nothing about it,

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and Russia has never done anything like this at the State level.

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Frankly speaking, I could never even imagine that such information 

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would be of interest to the American public or that the campaign 

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headquarters of one of the candidates –

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in this case, Mrs. Clinton – apparently worked for her,

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rather than for all the Democratic Party candidates in an equal manner.

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I could never assume that anybody would find it interesting.

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Thus, in view of what I have said,

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we could not officially hack it.

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You know, it would require certain intuition and knowledge 

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of the U.S. domestic policy peculiarities.

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I am not sure that even our experts from the Ministry 

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of Foreign Affairs have such intuition.

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Do you not think this is sort of the time when everyone should sort 

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of come clean about it? Russia tries to hack America,

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America tries to hack Russia, China tries to hack America,

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China tries to hack Russia? Everyone tries to hack each other.

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One of the purposes of the G-20 is to come up with a new set of rules 

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so this can become a more ordered version of foreign policy 

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when everybody is doing this. Allegedly.

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I believe that the G20 should not interfere,

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because there are other platforms for that.

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The G20 was established as a forum to discuss,

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first and foremost, world economic issues.

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If we load it with… Of course, politics affects economic processes,

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this is obvious, but if we bring some squabbles, or not squabbles,

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rather, some matters that are really important but relate purely 

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to world politics, we will overload the G20 agenda and instead 

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of addressing such issues as finance, structural economic reforms,

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tax evasion and so forth, we will engage in endless debates concerning 

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the Syrian crisis or some other global challenges,

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of which there are many, or the Middle East problem.

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We should find other platforms, other forums for that,

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and there are plenty of them, including, for example,

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the UN and the Security Council.