Meeting of the Presidium of the Presidential Council for Economic Modernisation and Innovation-Based Development of Russia.
Excerpts from Dmitry Medvedev’s opening remarks:
Meeting of the Presidium of the Presidential Council for Economic Modernisation and Innovation-Based Development of Russia
The meeting of the presidium of the Council for Economic Modernisation and Innovation-Based Development was devoted to innovative processes in exploration and mining.
Selling these resources on international markets remains one of the most important sources of revenue for the budget of our country, with all its upsides and downsides.
We strive to get rid of our excessive dependence on hydrocarbon exports and make the structure of our economy more balanced and sustainable. However, the mineral resources sector will, for a long time yet, remain one of the major sources of economic growth for our country. Most importantly, it can and should create demand for high-tech, modern equipment, which, in turn, should allow for more efficient use of our natural reserves and minimise adverse effects on the environment.
Production at existing fields is gradually declining, and we need innovative outside-the-box technical solutions. In addition, new fields are usually located in remote areas or the continental shelf, and require substantial, sometimes vast, investments in infrastructure.
The until recently high oil prices and the ongoing search for new production processes made the extraction of difficult oil economically viable. Everyone has heard about the shale revolution in the United States and its impact on global oil production. Russian companies are also implementing projects related to unconventional hydrocarbon production.
We traditionally purchase many types of prospecting, exploration and production equipment from foreign countries. This is high-end equipment. Unfortunately, Russian products have been criticised for a reason. Russian companies were not always able to offer competitive comprehensive solutions and proper services. Today, we found ourselves in a new economic environment. In fact, hydrocarbon production equipment has become the subject of political struggle and political bargaining. Along with finance, the oil and gas sector, keeping in mind its importance for the budget, has become the main target of sanctions pressure on Russia. In addition, due to declining world oil prices and devaluation of the rouble, companies have had to partially revise their purchasing policies. On the other hand, this has created a good opportunity for implementing the import substitution programme in this area.
The corresponding plans have been approved, including a roadmap to introduce innovative processes in the fuel and energy sector and an action plan to reduce import dependence in this sector, as well as an action plan for import substitution in the oil and gas engineering industry.
Meeting of the Presidium of the Presidential Council for Economic Modernisation and Innovation-Based Development of Russia
It is important to ensure the effective implementation of these documents and to support promising projects to create hardware, software and infrastructure. This requires team efforts by the relevant ministries, including the Ministry of Industry and Trade, the Ministry of Education, the Ministry of Environmental Protection and the Ministry of Energy, and, of course, the Russian manufacturers, research and engineering organisations, as well as the production companies that determine the demand in this area.
In recent years, several technical methods and types of equipment have been developed with state support that are as good as their foreign counterparts. Projects in this area are funded at the expense of development institutions. However, we haven’t done much yet to really engage in this activity.
A draft order to expedite this work has been prepared. It touches on various aspects of regulation, including the introduction of mandatory certification of products for geological prospecting and exploration. The Ministry of Natural Resources proposes introducing a simplified licensing procedure for individual parcels of subsoil that are planned for developing difficult reserves.
We have also repeatedly discussed the issue of rational subsoil use, including integrated development of multicomponent fields. To do so, the law must be amended.
Proposals related to
tax incentives, including reducing taxation of revenue through deducting the
cost of pilot and geological exploration activities, depending on their
conditions, were also presented. This is not a solution, but a proposal to at
least study these issues and arrive at a final decision. In general, you need
to motivate mining companies to actively acquire Russian-made equipment, parts
and components, and software, including from innovation-driven small and
medium-sized enterprises. Of course, such acquisition should be based on market
principles and should guarantee the effectiveness of all production and
business processes. If mining companies seek financial support from the state,
it is advisable to tie in obtaining such support with investments into
research, designs and procurement of Russian innovative products.
