Russian Industrialists Union Urges Support of Small Oil Producers

December 5, 2012

The industry’s companies bring in over 40 percent of all tax revenues to Russia’s consolidated budget. In the total export turnover, the share of the oil an gas industry’s products amounts to 60 percent. In February 1992, Yury Shafranik initiated the creation of the Russian Federation Union of Oil and Gas Industrialists. This non-governmental organization has been entrusted with the task of creating a suitable environment for efficient operation of Russian oil and gas and enabling its harmonious development to enhance prosperity of the national economy. Today, this organization unites almost all major companies of Russian oil and gas, and we are pleased to publish the OGE’s interview with the Union’s President, Gennady Shmal.

OGE: The Union will celebrate its 17th “birthday”… So, are we speaking of an “adolescent” organization?
Gennady Shmal: Well, it's all relative. Nowadays, as in Vladimir Vysotsky’s song, one year counts for three with God’s help. Thus, we may say, the Union today is in its “forties.” Back then, life was very intense, and many important events occurred. A lot of public and industrial organizations appeared, but not many of them survived. Our union membership consists of 200 companies and as many individuals. Furthermore, there are no foreign companies among them, despite their requests. That’s because from the very start, the purpose of the newly created organization was to support domestic producers operating in the oil and gas industry.

OGE: What practical measures have been taken to support the oil and gas sector of the national economy?
Shmal: For the most part, we’ll be talking about legislative measures. In the early 1990s, legislation was outdated, so laws had to be created “from scratch.” They were passed, and our organization actively participated in drafting many of the bills. Between 65 to 70 bills passed with our participation. At that time, legislative activity was the most important part of our work. In the last 10 to 12 years, our representatives have been participating in all parliamentary hearings in the State Duma. In the course of hearings, they state their positions and express their points of view. We also work with the Federation Council and with relevant committees, e.g. the Energy Committee and the Committee for Nature Use of the State Duma. The Union’s Board consists of highly qualified specialists. One of the Board members, the ex-Minister of Geology Viktor Orlov currently chairs the Federation Council’s Committee for Nature Use. Expressing our opinion on specific issues, we always base it on the opinion of experts in the field with deep knowledge of the subject in question. The biggest problem of our country today is the insufficient amount of specialists and the excess of amateurs among people running the industry. And here I always remember my friend Valery Greifer, who put it succinctly in one of his articles, “Amateurs are the worst plague since the locust.” That’s true indeed, and for the last 15 years we’ve seen examples of amateurs, upon being appointed CEOs of major companies, at times causing