OREANDA-NEWS. November 10, 2008. Vladimir Putin's opening address: Good afternoon, colleagues. Today we are going to analyse the situation in Russian oil industry.

A meeting in Severodvinsk last July spotlighted the main obstacles to increasing oil output and investment, in particular, bloated taxes and red tape.

We have reduced taxes for oil companies to give them an extra 140 billion roubles a year.

We see, however, that the global financial crisis, instability in raw material markets and plummeting oil prices require measures to ensure steady progress of the oil industry in these adverse conditions.

First, the existing procedure of oil export taxation was established for relative stability-at least, stable prices. It is time to change the pattern now that prices are going up and down by fits and starts.

The Economic Development, Energy and Finance ministries think the export duty billing period should be halved to one month to bring it into the best possible balance with current prices.

Second, we are working on proposals to extend accelerated depreciation mechanisms as part of fiscal modernisation. I will not specify the figures here. I can only say that huge amounts are involved. The change is expected to promote capital renewals and investment. Accelerated depreciation should fully concern oil industry as any other.

Third, exchange trade in oil and petroleum products should expand-in particular, through compulsory use of stock exchange technologies in purchasing raw materials and lubricants for state purposes.

Fourth, I see small and medium business as a considerable reserve of enhancing the effectiveness of oil industry. Small and medium companies exploit minor and depleted oilfields in many countries, and occupy essential niches vacated by integrated corporate giants.

We will provide all conditions for small and medium companies, open them access to the infrastructure and grant them opportunities to sell their products.

Last but not least, Russia is one of the largest oil producers and exporters, and so cannot stay aside from world price formation. We will develop a package of measures to actively impact the market situation.

Let us now pass to a discussion.