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Vladimir Putin meets with Transneft President Nikolay Tokarev

Date of publication: 30 March 2018

Photograph: Presidential Press and Information Office

Vladimir Putin has met with Nikolay Tokarev, Chairman of the Management Board of Transneft, to discuss the holding’s achievements in the past 25 years as well as last year’s performance.

V.Putin: Mr. Tokarev, this year Transneft turns 25. During the past years, it has transformed into the world’s biggest company of its kind.

Let’s start with this point. Please say a few words about the Company today. Of course, I can see its achievements in official documents, but I would appreciate your comments. Will you please review the Company’s performance in the previous year?

N.Tokarev: Mr. President, first of all, I’d like to sincerely congratulate you on behalf of the 115,000 employees of Transneft on your election and wish you success in developing and strengthening Russia. Transneft will always be with you and will always support your efforts. You may fully rely on us.

V.Putin: Thank you very much.

N.Tokarev: Speaking of our modest anniversary, we certainly have something to be proud of. A lot has been done during the 25 years. Today, Transneft is present and active in 64 federal subjects of Russia, covering eight federal districts. Our headcount is 115,000 employees.

Since Transneft was established, especially over the last 10 years, 19,000 km of linear portion of pipelines have been built, including 9,000 km of greenfield projects; 10,000 km of linear portion, whose service life has come to an end, have been replaced, 50 oil pumping stations have been built.

V.Putin: You mean last year?

N.Tokarev: The last 10 years.

V.Putin: Some 500 in total, right?

N.Tokarev: We have built 70,000 km of linear portion, including slightly more than 20,000 km of petroleum products pipelines and about 50,000 km of oil trunk pipelines.

V.Putin: Are we talking about pumping stations?

N.Tokarev: We have built 50 new ones.

V.Putin: What’s the total?

N.Tokarev: The total is over 500 oil pumping stations of various capacities.

In the last ten years, especially as new major projects have been commissioned, around 13,500 jobs have been created, including 9,000 jobs in Eastern Siberia, Primorye Territory, Khabarovsk Territory and Amur Region.

Among the most significant projects realised thanks to your support are: the Eastern Siberia – Pacific Ocean system, phase I and II; the Baltic Pipeline System; the Skovorodino – Mohe offshoot to China, the Zapolyarye – Purpe, Purpe – Samotlor and Kuyumba – Tayshet pipelines. Plus new petroleum products trunk pipelines, such as the Sever project, which let us increase the delivery of products to Primorsk by 15 million tonnes, and the Yug project, phases I and II, which has connected a cluster of refineries in the South of Russia into one pipeline transporting petroleum products from Volgograd southwards.

Rapid progress in import substitution has become a distinctive milestone for us. We launched this effort not in the wake of the sanctions, but back in 2008–2009, when the Board of Directors and the Company’s top management made all the necessary decisions and stated that, when possible, we should start manufacturing equipment and machinery at our domestic plants and form joint ventures in order to produce locally. Funds were allocated; we identified 26 priority areas to work in.

As of today, we’ve completed 23 product programmes out of this list and now 93% of all the equipment we need is made in Russia. Our programme anticipates this figure to further rise up to 97% in two years from now, by 2020. And we’ll hit this target, because we have encouraging results in the R&D field.

Together with our Italian partners, we have built promising plants in Chelyabinsk and now we fully satisfy the industry’s needs for our pumps. You saw those new facilities during your visit to Chelyabinsk.

This August, we’ll commission a new joint manufacturing facility with Italian partners which will put out electric motors and drives for these pumps. We produce our own molecule that forms the basis of a drag-reducing agent, which allows us to increase pumped volumes and which we have already started producing. Some time ago, there was only one manufacturer and vendor in the market, Baker Hughes, a US-based company. Now, we make it here, in Russia, with our Tatar partners.

We’ve also achieved good results in enhancing energy efficiency. By using new technologies and new operating modes of state-of-the-art equipment with better performance, we’ve reduced power consumption by 16%, which translates to some RUB 7 billion of savings.

We are continuing our efforts and, judging by the audit made by KPMG, Transneft now boasts the world’s best energy consumption per product unit (transported products). This is the conclusion of the reputable audit firm.

I’d rather not dwell on our social programmes that have been implemented…

V.Putin: What’s the average salary?

N.Tokarev: The average salary is 90,000 rubles a month depending on the region…

V.Putin: Do you plan to increase the salaries this year?

N.Tokarev: We’ve adjusted the salaries for this year by the current inflation rate; we plan to do this virtually every year. The salaries are a bit lower in Central Russia, to be sure, but they are higher in Eastern Siberia, the Far East and northern regions, where the monthly salary is well above 100,000 roubles.

There is a programme of voluntary health insurance in our Company. We also have an in-house nongovernmental pension fund, which is competitive on the market, ranking third after the pension funds of Gazprom and Russian Railways. So, our employees are also motivated to get a corporate pension.

Among the recent serious social programmes, I’d emphasise the ones for rural schools. During the next four years we plan to repair and overhaul rural schools, outfitting them with modern equipment and interactive attributes, with an emphasis on equipping physics, chemistry and mathematics classrooms. We’ve included 240 schools in this programme and we’ve already begun working on this project, which is now in full swing.

Other areas include healthcare, education, culture, sports and religion. In general, we try to help all of them, so that nobody takes offence.

V.Putin: Good.


Photograph: Presidential Press and Information Office

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