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Sechin and Ulyukayev recording of the conversation. “Take it, put it down, and let’s go have a cup of tea”: transcript of the negotiations between Sechin and Ulyukaev on the day the minister was detained

Sechin and Ulyukayev recording of the conversation. “Take it, put it down, and let’s go have a cup of tea”: transcript of the negotiations between Sechin and Ulyukaev on the day the minister was detained

At the trial against Alexei Ulyukaev on charges of corruption, the prosecutor announced on September 5 the recordings of wiretapping of the negotiations between the ex-head of the Ministry of Economic Development and the director of Rosneft Igor Sechin. RBC offers the reader a transcript of these records

Telephone conversation between the head of Rosneft and the minister

Sechin: Hello, Alexey Valentinovich? Expensive! (Laughter).
Ulyukaev: Yes, Igor Ivanovich? All attention. How glad I am to hear from you.
Sechin: Don't say it, me too. Well, firstly, I had unfulfilled assignments there, but there is readiness based on the results of work there ...
Ulyukaev: Yes.
Sechin: So, secondly, a lot of questions have accumulated both on the boards of directors and on everything.
Ulyukaev: Well, let's discuss everything.
Sechin: I have only one request: if you can drive up to us for a second, because here, maybe ... I'll show you at all. Well, look at the company.
Ulyukaev: Yes, I would be happy to look at the company, but why not.
Sechin: And in terms of time... Now I have big negotiations at 14:00 to start for two hours.
Ulyukaev: Uh-huh.
Sechin: Somewhere at 16.30: is that possible?
Ulyukaev: It is quite possible, yes. I'm flying tomorrow. Will you be in Lima?
Sechin: I will be in Lima.
Ulyukaev: But I will also be in Lima, we can continue there.
Sechin: Let's work.
Ulyukaev: Continue to work - come on. Now, wait a second... No, a little later, if I may.
Sechin: Come on.
Ulyukaev: Yes, because I will start at 16.
Sechin: What time? At 18?
Ulyukaev: Come on at 18?
Sechin: A little earlier, a little earlier.
Ulyukaev: At 17.30?
Sechin: Come on at 17?
Ulyukaev: Huh?
Sechin: Can you do it at 17?
Ulyukaev (sighs): Yes, I have here, including your, in my opinion, different procurement companies. That's where I collect them. Come on at 17.
Sechin: At 17? Thanks a lot.
Ulyukaev: Come on, everyone.
Sechin: All hugs, thank you.

First recording device

Unknown: Tell Shokina to put the basket in 206 and make tea.

There is a noise, a rustle and a creak of a door.
Sechin: Oh listen, and you're without a jacket...
Ulyukaev: (Unintelligible.)
Sechin: In general, you need some kind of jacket.
Ulyukaev: Don't, don't.
Sechin: Yes? Well, you sit down for now, okay?
There is a rustle, the sound of footsteps.
Sechin: Well, they delayed the execution of the order. They were on a business trip. As long as they collected here and there.
Knocks, whispers, sounds of zippers being fastened, the rustle of clothes are heard.
Ulyukaev: Get warm already.
Sechin: Don't talk.
Ulyukaev: You need to know when a car is the most...
Sechin: Huh?
Ulyukaev: Always when the distance is short.
Sechin: Well, yes.
Ulyukaev (sighs): What?
Sechin: To the right?
Ulyukaev: Green fence.
Sechin: Yes. Will Shokin bring tea?
Unknown: Yes, yes.
Sechin: And a basket with sausage.
Unknown: Yes, yes.
Sechin: Yes. (Coughs.) So, a few words, a little more about the company. Well, in 1995, when we started working, in principle, the company produced 4 million tons of oil, so nobody needed it... (Unintelligible.) So, then the return of withdrawn assets began.
Here is an interesting page four.

Paper rustling is heard.

Sechin: (Unintelligible.) What have we created during this time. Here we compared companies whose shares are traded on the stock exchange: in terms of resource base, in terms of geological exploration, in terms of current production, we rank first among public companies in the world. The cost of production is the most competitive.
Ulyukaev: Now, if you look - sorry, interrupt, in terms of capitalization, the company costs 2–2.5 times cheaper than comparable assets.
Sechin: Our tax base is the heaviest in comparison with any other companies and generally the heaviest in the world. Here you can boldly add 25 to these two or three, and this will be taking into account the tax base. Plus transportation. Here, count. Relatively speaking, 35 is the lower limit for us, which ...
Ulyukaev: (Coughs.) Operating profitability?
Sechin: No, I mean the price floor.
Ulyukaev: That's what I'm talking about - operating, excluding loan servicing.
Sechin: Yes, which will allow us to provide operating profitability. Therefore, the situation is not so simple. All the same it is necessary to be engaged in tax base.
Ulyukaev: It is necessary to do it. It is so big with us, it is growing, it is growing.
Sechin: Well, growing and killing (decreasing? - illegible). I talked to (inaudible) from Eni, they give 2 billion to the Italian budget. We have 50 billion rubles, which is a plus to the fact that you are asking us today to add 17. We have already given a part, and we are already generating 50 billion annually. So, of course, we need to think about it. Exxon has a total fiscal burden of 43% and shares are expensive. Understand? (Unintelligible.) Here are the bips in the first column outside the frames. And as bought, our shares became the fourth. And why? Because we have allowed to balance our resource base.
Ulyukaev: That is, they have 20%, a fifth? (BP has a 19.75% stake in Rosneft. - RBC). Wait, if they balance the resource base, you don't have it on your balance sheet?
Sechin: It remains, it remains, it doesn't cost us anything at all.
As you know, in India we are acquiring Essar (Essar oil, owns a large refinery near the city of Vadinar, a network of gas stations and a port, the deal has already been closed. - RBC), we will also apply, we need project financing there, we will support ...
Ulyukaev: Listen, will they have Iranian oil there?
Sechin: We think, part Iranian, part Venezuelan, part Iraqi, 20 million tons per year. A very high Nelson index - 11.8 there (the higher this index, the higher the cost of the refinery and the quality of its products. - RBC). Deep-water port, 2700 filling stations, so this project is unique for this market.
Ulyukaev: And how much of it will be processed through your network of filling stations?
Sechin: Well, about a quarter.
Ulyukaev: This is, in fact, the first such large purchase.
Sechin: It's true.
Ulyukaev: No one has yet succeeded.
Sechin: It's true. Well, what else can I say. In terms of development technology, we occupy a serious leading position, if we are not ahead of the world leaders, then we step on the heels very seriously.
(They talk about freezing oil production, about the planned increase in production in Venezuela, Iran. - RBC)
Sechin: I think that no one is telling the truth, and everyone needs about six months to issue additional volumes. And if we freeze for these six months, it turns out that we will give the Americans the opportunity to give oxygen to shale. And here, it seems to me, the slyness lies in this: now to support shale oil.
Ulyukaev: Uh-huh.
Sechin: They will take advantage. And then they will say: “Well, we froze for half a year,” and these have a time lag (apparently, the USA. - RBC) for preparing new volumes. And we will lose markets.
Ulyukaev: Plus, Trump is very much going to support production there.
Sechin: Yes, he wants to support production, including through taxes.
(Unintelligible.) Yes, this must be taken into account, well, in general, we are working quietly, Lesha.
Ulyukaev: Well, look, with regard to taxes, I am completely on your side with both hands. I think that we are acting short-sightedly, we want to attract investments, we will not attract investments and we will undermine our own climate of the investment base. This is a dead end, especially for all old deposits. Because there you just need to drill and pump, drill and pour water. But this cannot stop the process, and if yours falls (obviously, production. - RBC) ...
Sechin: Well, how...
Ulyukaev: What are you going to do at your own loss? This is strange...
Sechin: Of course, the logic is strange.
Ulyukaev: We are, as it were, 100% in favor.
Sechin: Well, Lyosha, I beg you, don't be offended by us. For all these puffs ...
Ulyukaev: No, Igor, why...
Sechin: Well, I felt, well, it was like a storm a little...
Ulyukaev: No, you don't...
Sechin: We are working on privatization. I met today and will be tomorrow. I will tell you the following: they are ready to lend in full, they do not particularly want to buy. Therefore, we make various proposals there. We also work with the Japanese. (Unintelligible.) In general, I don’t want to say anything yet, but we are working hard to complete the task in full.
Ulyukaev: Honestly, for today's considerations, I really wanted to attract the Japanese. All these Indians - all this is not right. You won't get anything from Indians.
Sechin: We are working with the Koreans...
Ulyukaev: Well, no, neither the Chinese nor the Indians are needed at all...
Sechin: There will be no synergy with them.
Ulyukaev: Absolutely. But from those you can still get.
Sechin: They can, yes. I also think that they can. They are very pragmatic. Of course, they have another task - to get political pluses, on the territory there ... We even raised such questions during the negotiations, but we rejected it.
Ulyukaev: Of course.
Sechin: They immediately said: “Guys, no!”
Ulyukaev: They are doing well now. Abe has to show his people something. He is constantly told: "You are making constant concessions to the Russians." And he: “Well, why, I am acquiring a very interesting asset that is guaranteed to provide our country with energy resources for decades to come.” It was quite profitable for them.
Sechin: You know, this is what I told them: “Guys, the essence of our offer is this: you get a share in the company, and along with it, access to the Central Tatar area, a share in the Verkhnechonsk share (apparently, we are talking about Verkhnechonskneftegaz. - RBC) and a number of other fields that we are developing together with you. You, however, receive a minority stake, and in case of force majeure, we undertake the obligation to supply only to the Japanese market.”
Ulyukaev: It is very important for them. They have a very large dependence on the Gulf.
Sechin: Yes, we told them that. What is force majeure? This is when the price drops or rises by 20% sharply: the company begins to supply only to your address, and you reduce your dependence on suppliers. Our offer was very decent, balanced. True, there could be a delay in terms. They are trying to get a cancer for a stone through tender procedures. Therefore, we told them: “Here, the government issued an order before the fifth day, so we don’t know anything, we ourselves are in the same situation, you keep in mind.” We told them: "10% of the advance must be transferred, and if you do not complete the transaction, the money becomes the property of the company."
Ulyukaev: Well, of course. It will be important now. There, on the 20th, in Lima, the boss will meet with Abe, this is a must.
Sechin: Yes, yes, I will be in Lima.
Ulyukaev: I will too. And even before that, I meet with this Seko (Hiroshige Seko is the Japanese Minister for Economic Cooperation with Russia. - RBC), there, too, he still needs to be crushed, the minister of this same one responsible for Russia.
Sechin: Well, yes, yes. Well, I will not say that they somehow began to remove us.
Ulyukaev: Uh-huh, uh-huh.
Sechin: No. They have an intention. They make attempts, they directly told us: “Here, it will be hard for us (inaudible)”. But we immediately told them: “You guys don’t contact us on these issues: we are soldiers - we are told to do what we are told.” Lesha, well, thank you very much, I don’t delay, I know you have a difficult schedule.
Ulyukaev: Yes, now I will drop by the courses on the way.
Sechin: Uh-huh, (inaudible).
Sechin: Let's go.
The rustle of clothes, knocks.

Second recorder

Motor noise.
Sechin: All right, x... with him. But here you can, here, as it were, but, here, yeah ...
Unknown: Are you coming here?
Sechin: Yes, and tell Shokina to put the basket in 206 and make tea for now.
Sechin: Listen, are you without a jacket, huh?
Ulyukaev: (Unintelligible.)
Sechin: How do you even walk like that? That's the thing, you need some kind of jacket ...
Ulyukaev: Don't, don't, why?
Sechin: Huh? Okay, wait a second, you sit down for now, okay?

Rustle, steps.

So, wait a second, wait a second ... Well, I'll be so short then so that you don't freeze. Well, first of all, I apologize for the delay in completing the assignment. We were on a business trip.
Ulyukaev: Well, life, of course...
Sechin: So, while back and forth, we collected the volume. But in general, you can consider the task completed. Here, take it, put it down and let's go have a cup of tea.
Ulyukaev: Yes?
Sechin: Here's a key for every fireman.
Ulyukaev: Yes, let's go?
Sechin: Yeah.
Knocks, rustling, sounds of zipper being fastened, footsteps.

Sechin: Will Shokin bring tea?
Unknown: Yes, yes.
Sechin: And a basket there...
Man: Yes, yes!
Sechin: (Unintelligible.)
Unknown: Tea has been brought.
From time to time, faintly distinguishable voices of people, coughing, creaking of doors, sound of steps, phone calls are heard.
Unknown speaks on the phone: Hello, yes? Come on, let me clarify. Everything is fine, drinking tea. Here, simply according to your order, no cars are released from the territory (inaudible). We save the block mode. BUT? Yes, yeah. Everything, I understand, yes, well, there is! Okay, okay, yes, there is! Yes, hello? Everything is fine? In sense - the mode is saved? Everyone, come on. Ah, yes, yes, I understand, okay.

The sound of an engine, a phone call is heard.

Unknown speaks on the phone: Yes? Well, here I am, yes, yes, hello, hello ... The car came up. I did, yes.

Motor noise.

Sechin: (Unintelligible.)
Unknown: From Ivanych? (Laughs.)
Sechin: Yes, to our entrance.
Rustle of clothes, knock.
Sechin: Yeah.
Ulyukaev: A basket?
Sechin: Yes, take the basket.
Ulyukaev: (Unintelligible.)
Sechin: Everyone, happy, thank you very much.
Ulyukaev: (Unintelligible.)
Sechin: Goodbye.

The secret recording of the conversation between Sechin and Ulyukayev, which was presented in court as evidence of the latter's guilt, provides a rare glimpse behind the scenes of the process of making important economic decisions at the highest state level.

Let's try to thoroughly analyze this conversation, which took place in November 2016 in the Rosneft office, from a business and economic point of view. We will not touch on the morals of the country's top leadership, or whether Ulyukayev was actually guilty of taking a bribe. We are only interested in information related to the oil industry and the state of affairs in Rosneft.

Let's make a reservation right away - the fact that Sechin knew in advance that this conversation would be published somewhat devalues the conversation's value as a source of information and forces one to examine his statements from a certain angle. But, nevertheless, some grains of new facts can be gleaned from this dialogue.

During the meeting, Sechin shows Ulyukaev a presentation, apparently dedicated to the Rosneft company. During the conversation, they move from one page to another. Apparently, this presentation is somehow connected with the purpose of Ulyukaev's visit, unless, of course, this meeting itself was in fact just a pretext for transferring a bribe.

Dialogue 1. On the cost of oil production

Sechin: What have we created during this time? Here are the main indicators of oil companies whose shares are traded on the stock exchange. This means that this is the resource base of current production and production costs. Only public companies were compared. This means that we are the first in the world in terms of resource base and exploration. In terms of current production, it ranks first among companies. The cost price is also, as it were, the most highly competitive. Here you need...

Ulyukaev: Now, if you look, I will kill the capitalization of the company. These positions, it will be clear that the asset is twice as cheaper than other assets comparable in terms of characteristics.

Sechin: We are. Except for one nuance - the tax base. We have the heaviest tax base compared to any other companies. The heaviest in the world, that is. Here you can boldly add 25 to these two and three, this will be taking into account the tax base. Plus transportation. That is, consider, relatively speaking, 35 is the lower limit for us.

Ulyukaev: Are these yield prices?

Sechin: No, this is the bottom price level.

Ulyukaev: I say<нрзб>taking into account the servicing of loans?

Sechin: Yes, which will allow us to provide additional operating profitability

Sechin shows Ulyukaev the fourth page of the presentation. It compares the performance of the world's largest public oil companies, including Rosneft, such as proven oil reserves, current production, cost of production per barrel. According to Sechin, all comparisons are in favor of the Russian company.

However, in terms of market capitalization, Rosneft lags behind other companies, which Ulyukaev draws attention to.

To this, Sechin replies that Rosneft's tax burden is incommensurably greater compared to any other companies.

The head of Rosneft says that despite the low direct cost of oil production ($2-3 per barrel), the company's costs are too high due to high taxes (up to $25 per barrel) and transportation costs.

Sechin concludes that in order for the company to have a positive operating profit, it is necessary that the price of oil be at least $35 per barrel.

Thus, Sechin outlined the following situation in which the company is at the break-even point:

Selling $35 per barrel
Direct production costs ($2–$3) per barrel
Taxes (25) dollars per barrel
Other costs (7-8) dollars per barrel
Operating profit = 0

This statement is easy to verify by looking at the financial report of Rosneft under IFRS for the 3rd quarter of 2016 - the last one that was at the disposal of the participants in the conversation.

In that quarter, oil production by Rosneft's own companies, excluding associates and joint ventures, was 355.4 million barrels.

Let's recalculate the quarterly figures of the profit and loss statement in dollars for the figures per barrel produced. The average exchange rate for the quarter was about 65 rubles per dollar.

Costs for the Production of Oil and Liquids (Liquid Hydrocarbons) segment were as follows:

Indeed, the statement of I.I. Sechin corresponded to reality - the operating costs for the extraction of carbohydrates were about $ 3 per barrel.

According to the reports, these "production and operating expenses for the production of hydrocarbons include the cost of raw materials and materials, maintenance and repair of equipment, wages for workers, measures to enhance oil recovery, purchase of fuels and lubricants, electricity and other similar costs of the Company's production enterprises".

True, the head of Rosneft did not mention other expenses, including such important ones as depreciation of fixed assets. However, the presentation may have been about the marginal cost - that is, the net cost of each additional barrel of oil produced.

The statements of I.I. Sechin regarding the tax burden. Indeed, according to this report, the tax expense amounted to $12 per barrel, while export duties in November 2016, that is, at the time of this conversation, were at the level of 92.7 per one ton of oil, that is, about 13 dollars per barrel.

By the way, to date, these taxes have increased even more due to rising oil prices - in the second quarter of 2017, the MET was 17–18 dollars, and export duties were about 11 dollars per barrel.

Oil transportation costs (both for export and for refineries) are included in another segment of Rosneft - Refining, Commerce and Logistics, and are not included in this table. The same segment also includes export duties, which we also did not include in this table.

Dialogue 2. We pay a lot of taxes, but little for foreigners

Sechin: Therefore, the situation is not so simple, we need to deal with the tax base.

Ulyukaev: You have to do it, for sure. It is not only big, but growing, growing.

Sechin: Growing and running away I talked to the same ENI there, they donate 2 billion euros to the Italian budget. We are 50 billion. This is a plus to the fact that you are asking us today to add 17 there. We have already given a part, and we are already generating 50 billion annually. So, of course, we need to think about it. Exxon has a total fiscal burden of 43% and shares are expensive. Understand?

Ulyukaev: No, of course.

Sechin: They have a stable 43, and I have 80. So we are counting on the growth of interest there. It's hard, yes.

Sechin informs Ulyukaev that the Italian ENI pays 2 billion euros to the budget, while Rosneft pays 50 billion. At the same time, Ulyukaev himself "asks to add 17 there."

This statement is somewhat confusing. ENI's income tax in 2016 was indeed €1.9 billion according to their annual report.

But Rosneft's tax expenses, including income tax, amounted to only 2,069 billion rubles in 2016, that is, about $31 billion at the average exchange rate of the year.

Maybe we are talking about the entire oil industry in Russia, and Sechin stands up, including for his colleagues? However, the total tax collection from all oil companies is much higher than the mentioned 50 billion - in 2016, the state planned to collect only 5 trillion from oil workers. rubles, that is, about 80–90 billion dollars at the then exchange rate.

Perhaps this entry is fragmentary, the conversation has already moved on to another topic and we are talking about dividends from Rosneft. Indeed, ENI is partially owned by the Italian state and pays dividends to it - however, in fact, no more than one billion a year. Rosneft in 2016 paid dividends (relating to the previous year) in the amount of 87 billion rubles. The state-owned Rosneftegaz then had a 69.5% stake in Rosneft, and therefore received dividends of about 60 billion rubles.

It is possible that the conversation was generally about the dividends of Rosneftegaz - it was around that time that the government was talking about taking money from this structure to the budget.

Thus, the content of this part of the conversation is somewhat cryptic. Perhaps the reason for this was inadequate recording or incorrect transcription of the conversation. However, most likely, the head of Rosneft simply overestimated the amount of taxes in a conversation - as a polemical device.

Dialogue 3. The British seize the resource base

Sechin: This means that we are counting on the growth of interest there. It's hard, yes. For example, BP. That's why I'm working with shareholders now, telling them (inaudible) what they should take into account. Here are bi-peers in the first column outside the frames ... And how they bought our shares became the fourth. And why? Because we allowed to put the resource base on the balance, in proportion to ownership.

Ulyukaev: That is 20%? Fifth part?

Sechin: Yes. And they immediately jumped out to another level.

Ulyukaev: Wait, if they put your resource base on their balance sheet, you don't have a balance left?

Sechin: Remains, remains. Oil remains. But it doesn't cost us anything at all. It's just permission to use them. And they also report on our geological exploration. We did a 150% replacement there, they just consider themselves 20% of this replacement. And the same for prey<нрзб> . They would never have gone beyond this level of production if they had not given our projects too.

In this part of the conversation, we are talking about the British company BP, which is a shareholder of Rosneft with a 19.75% stake. Apparently, I.I. Sechin points out that this company for some time lagged behind competitors in terms of market capitalization, but after acquiring shares in Rosneft, it immediately moved to fourth place in the world.

Quite enigmatic is Sechin's phrase that "we allowed our resource base to be put on the balance sheet."

BP, in accordance with IFRS, accounts for its stake in Rosneft as an investment in an associate. The British company does not consolidate Rosneft's figures, but accounts for the corresponding share in Rosneft's profits as its return on investment, and its share in accounting capital as the investment itself.

As part of the additional reporting, BP includes statistics on its production and reserves and includes a part of the production and reserves of Rosneft corresponding to their share in the capital of the Russian company. For this, of course, no permission from anyone is required.

It is clear that we are not talking about the physical allocation of some deposits and assets to the British, as Ulyukaev suggested. The British simply receive dividends from Rosneft and the opportunity to vote on the board of directors. It is clear that Ulyukaev is not so stupid as not to understand this - apparently, in the course of the conversation there was a simple misunderstanding.

Sechin goes on to note that Rosneft's reserve replacement ratio is 150%. This means that for each barrel of oil produced by the company, there was an increase in the number of proven reserves by one and a half barrels. Since the British reflect part of Rosneft's reserves in their reports and presentations as their own, the increase in Rosneft's reserves also increases their reported reserves. Thanks to this, according to I. I. Sechin, the market capitalization of BP has grown.

Note that although there is a sound grain in the reasoning of the head of Rosneft, but the growth of BP capitalization last years occurred by overcoming the consequences of a large-scale accident and an oil spill in the Gulf of Mexico. The stock price of the company collapsed after this incident in 2010, but after a while began to recover.

Dialogue 4. We acquire ESSAR in India

Sechin: Yes, yes, yes, absolutely. A very serious step, of course, we have taken, as you know, in India to acquireESSAR.I wanted to ask, I will apply, it will be necessary to support project financing ...

Ulyukaev: Listen, will there be Iranian oil there?

Sechin: Part Iraqi, part Venezuelan, part Iranian. 20 million tons of processing, a very high Nelson index - 11.8. Deep water ports, 2700 refuelings. This is such a project for the market - simply unique.

Ulyukaev: But their own refills through them. What part of the processing, how much goes through its network of gas stations?

Sechin: Fourth part. They have a plant there, maybe the terminal allows you to do export-import operations with crude oil.

Ulyukaev: No. Because visiting Indians is a big deal.

We are talking about the acquisition by Rosneft in India of a large oil refining company ESSAR. In August 2017, this deal was completed - Rosneft and the international trader Trafigura acquired 98% of this company for $12.9 billion. Rosneft received 49% of the Indian company and it can be assumed that the cost of the acquisition was half of the total, that is, 6.45 billion dollars. There is no exact information yet on how this amount will be paid - entirely in cash or by taking over the debt on loans from this debt-ridden company by Rosneft.

Rosneft, which is also heavily indebted, would prefer a form of project finance to buy the Indian company. In such cases, a special company is created, on which loans attracted from banks are used to carry out this acquisition. Probably, Igor Ivanovich asked Ulyukaev to work on obtaining funds for this project from state-owned banks like VTB.

True, no specific figures were named in this conversation, but they may have been cut from the recording before providing it to law enforcement agencies.

Dialogue 5. OPEC+ production cuts and Venezuelan production growth

Sechin: We are developing, despite the wishes of OPEC, I reported to Vladimir Vladimirovich about this. All of them are preparing the development of production, all of them, Venezuela, I absolutely know for sure. They plan to raise production by 250 thousand barrels per day within six months. So the first one.

Sechin's remark that he "absolutely knows for sure" that Venezuela will raise production by 250,000 barrels per day within six months is quite indicative.

In fact, in the time that has passed since the end of this conversation, Venezuela, on the contrary, has seriously reduced production. The reason for this was the critical financial condition the national oil company PDSVA, which simply does not have enough money to pay debts to service companies and for new drilling.

Such ignorance of Sechin about the situation in Venezuela is somewhat alarming, given that Rosneft was giving advances to Venezuelans at that time in the total amount of $6 billion.

Sechin: Second. Iran will increase, they now have 3.9-4.0. They have a plan to add a million tons of barrels.

Ulyukaev: They and 4 somewhere ready to be frozen.

Sechin: 3.9 now, and 4.9 want.

Ulyukaev: 4. No, no, they are ready for 4 and frozen.

Sechin: Well.

Ulyukaev: Well, probably yes.

Sechin: Yes. I don't think anyone is telling the truth. They all need, I think, Iraq, Nigeria, they need half a year to issue additional volumes. And these six months, if we freeze it, will enable the Americans to give a little bit of oxygen to oil shale. And here, it seems to me, the cunning is: now to support shale oil here.

Ulyukaev: Yes.

Ulyukaev: This will be used.

Ulyukaev: Plus, during this time, the Trump administration, and he is very about traditional sources, he is very much going to support production

Sechin: Yes. He wants to support prey, it's true. He stated it.

In this fragment, we are talking about the agreement being prepared at that time by oil-producing countries within the framework of the OPEC + process to limit oil production.

I.I. Sechin assumes that the oil states will not freeze production earlier than in six months, since they would like to increase their production during this time to a level that would be acceptable to them under freezing conditions.

If, nevertheless, production is frozen now, he continues, then the Americans will certainly take advantage of this and increase the production of shale oil, which will be facilitated by the new Trump administration. As a result, in six months, the agreement to freeze production will simply fall apart.

Time has shown the futility of the fears of the head of Rosneft. The agreement to limit production was nevertheless adopted in December 2016, and in May 2017 it was further extended until March 2018.

Dialogue 6. Finding money for privatization

Sechin: We are working on privatizations, that means. I met today, tomorrow I fly to Europe. The main thing, I'll tell you, means the following: they are ready to lend in full, they don't particularly want to buy. That's why we do there different offers, we compose different carrots in order to pull them into promotions. It means that progress is being made in Asia, the Japanese - you know, they have now made changes to the legislation, after all, there now the emperor must sign, but they have already been submitted to parliament, they are also being worked on.

Ulyukaev: Here I am, honestly, from today's considerations, I would like to attract the Japanese. All these Indians - all this is not the same, you will not get anything from the Indians.

Sechin: We work with Koreans. No, not the Chinese, not the Indians, it's...

Ulyukaev: I don't need it at all.

Sechin: There will be no synergy with them anymore.

Ulyukaev: Absolutely, but those can be obtained.

Sechin: These can, yes, and I also think that these can. They are set up very pragmatically, they, of course, want to fulfill their main task- go and get political<нрзб> , there on the territory, we even raised such questions during the negotiations, but we rejected it.

Ulyukaev: Well, of course.

Sechin: They immediately said: guys, no.

Ulyukaev: They are doing well now. What does it mean to decide… Abe has to show something to his people, they tell him, you are making constant concessions to the Russians. He will say: yes, why, I am acquiring very interesting actives, this is a guaranteed supply of our country with external energy resources for decades to come. I create for the Japanese.

Sechin: So how is it?

Ulyukaev: It was quite profitable for them.

Sechin: You know, we, I just tell them that, guys, here the essence of our proposal is this: you get a share, a share in the company, firstly, conditions for the development of joint projects. This means that our second proposal, following the share, is the creation<нрзб> for extraction, transportation, joint work in the markets. If you do this, then you get access to the central Tatar section of the Verkhnechonskaya Dole and a number of other deposits that we are developing together with you. True, you get a minority stake here, and if you agree to this, then in case of force majeure we undertake the obligation to supply only to the Japanese market.

Ulyukaev: This is very important for them, they are very dependent on the Gulf. They need to balance.

Sechin: This is exactly what we are saying, but what is force majeure - we prescribed a price change of 20%, for example, a price increase of 20% or a price decrease of 20%, a sharp change in the market situation, then the company begins to supply the entire volume of production only to you , and you reduce any dependence on other suppliers, in general, our offer is very decent and balanced, we are working.

There are risks of delaying deadlines, so deadlines are of fundamental importance here. They are trying to turn the tables on the tender procedures there, but they themselves are still waiting for the results of the audit.<нрзб>So the government issued an order, so we don’t know anything, and we ourselves are already in this situation: we must sign it before the fifth day. Keep this in mind, this is no longer our competence, it is the competence of the government. Please, we can announce on the 15th if everything fits in with you. So yes, on the date of signing, we told them - you will transfer 10% of the advance here to us, if you do not conclude a deal, it becomes the property of the company. Well, here are the conditions.

In this most interesting fragment of the conversation between Sechin and Ulyukaev, we are talking about an attempt to sell a stake in Rosneft to foreign investors. Foreigners, unfortunately, did not show much interest in this asset - they were ready to lend to the company, but not to buy assets.

By the way, it is quite interesting that someone was ready to lend to Rosneft in conditions when this is directly prohibited by international sanctions.

As can be seen from the dialogue, negotiations with the Japanese on the sale of their stake in Rosneft were quite serious, rather detailed details of a possible deal had already been discussed. True, the Japanese, even in these negotiations, managed to raise the issue of ownership of the Kuril Islands.

They tried to attract the Japanese by providing them with a share in the fields and guarantees of exclusive supplies from these fields in the event of a crisis in the oil market.

Although the parties were close to signing the deal, and even specific dates were announced, this plan, as you know, failed.

Literally a few weeks after the conversation between Sechin and Ulyukaev, it was announced that a 19.5% stake in Rosneft had been sold to a consortium of investors, which included the international trading company Glencore and Qatar. This deal was apparently Plan B, since the president and the government, of course, would prefer to enter into a long-term relationship with Japan in order to diversify the sources of oil revenue.

It is noteworthy that Sechin does not seek to expand cooperation with China. Apparently, the already existing relationships - large deliveries, the construction of an oil pipeline, the receipt of an advance of 35 billion dollars - seemed to the head of Rosneft quite sufficient in relations with these partners. True, later a 20% stake in the Verkhnechonskoye field, which was offered to the Japanese, had to be sold to a Chinese company.

Epilogue

This most interesting conversation about the prospects of Rosneft, as you know, ended quite unexpectedly - one of its participants was arrested. We will not make any assumptions about the actual guilt of Ulyukaev - we simply do not have any information.

Although the most curious and confidential moments of the conversation were undoubtedly cut by the hand of the "injured party", this recording sheds some light on the morals, degree of awareness and decision-making among the country's top leadership and the largest state-owned company.

Ruslan Khaliullin

Telephone conversation between the head of Rosneft and the minister

First recording device

Unknown: Tell Shokina to put the basket in 206 and make tea.

Knocks, whispers, sounds of zippers being fastened, the rustle of clothes are heard.
Ulyukaev: Get warm already.
Sechin: Don't talk.
Ulyukaev: You need to know when a car is the most...
Sechin: Huh?
Ulyukaev: Always when the distance is short.
Sechin: Well, yes.
Ulyukaev (sighs): What?
Sechin: To the right?
Ulyukaev: Green fence.
Sechin: Yes. Will Shokin bring tea?
Unknown: Yes, yes.
Sechin: And a basket with sausage.
Unknown: Yes, yes.
Sechin: Yes. (Coughs.) So, a few words, a little more about the company. Well, in 1995, when we started working, in principle, the company produced 4 million tons of oil, so nobody needed it... (Unintelligible.) So, then the return of withdrawn assets began.
Here is an interesting page four.

Paper rustling is heard.

Interrogation of prosecution witnesses in the Ulyukaev case. How it was
SOCIETY
Ulyukaev: Plus, Trump is very much going to support production there.
Sechin: Yes, he wants to support production, including through taxes.
(Unintelligible.) Yes, this must be taken into account, well, in general, we are working quietly, Lesha.
Ulyukaev: Well, look, with regard to taxes, I am completely on your side with both hands. I think that we are acting short-sightedly, we want to attract investments, we will not attract investments and we will undermine our own climate of the investment base. This is a dead end, especially for all old deposits. Because there you just need to drill and pump, drill and pour water. But you can’t stop the process, and if yours falls (obviously, production. - RBC) ...
Sechin: Well, how...
Ulyukaev: What are you going to do at your own loss? This is strange...
Sechin: Of course, the logic is strange.
Ulyukaev: We are, as it were, 100% in favor.
Sechin: Well, Lyosha, I beg you, don't be offended by us. For all these puffs ...

Ulyukaev's courts: how the ex-minister has changed since the moment of detention

Ulyukaev: No, Igor, why...
Sechin: Well, I felt, well, it was like a storm a little...
Ulyukaev: No, you don't...
Sechin: We are working on privatization. I met today and will be tomorrow. I will tell you the following: they are ready to lend in full, they do not particularly want to buy. Therefore, we make various proposals there. We also work with the Japanese. (Unintelligible.) In general, I don’t want to say anything yet, but we are working hard to complete the task in full.
Ulyukaev: Honestly, for today's considerations, I really wanted to attract the Japanese. All these Indians - all this is not the same. You won't get anything from Indians.
Sechin: We are working with the Koreans...
Ulyukaev: Well, no, neither the Chinese nor the Indians are needed at all...
Sechin: There will be no synergy with them.
Ulyukaev: Absolutely. But from those you can still get.
Sechin: They can, yes. I also think that they can. They are very pragmatic. Of course, they have another task - to get political advantages, on the territory there ... We even raised such questions during the negotiations, but we rejected it.
Ulyukaev: Of course.
Sechin: They immediately said: “Guys, no!”
Ulyukaev: They are doing well now. Abe has to show his people something. He is constantly told: "You are making constant concessions to the Russians." And he: “Well, why, I am acquiring a very interesting asset that is guaranteed to provide our country with energy resources for decades to come.” It was quite profitable for them.
Sechin: You know, this is what I told them: “Guys, the essence of our proposal is this: you get a share in the company, and along with it, access to the Central Tatar area, a share in the Verkhnechonsk share (apparently, we are talking about Verkhnechonskneftegaz. - RBC) and a number of other fields that we are developing together with you. You, however, receive a minority stake, and in case of force majeure, we undertake the obligation to supply only to the Japanese market.”
Ulyukaev: It is very important for them. They have a very large dependence on the Gulf.
Sechin: Yes, we told them that. What is force majeure? This is when the price drops or rises by 20% sharply: the company begins to supply only to your address, and you reduce your dependence on suppliers. Our offer was very decent, balanced. True, there could be a delay in terms. They are trying to get a cancer for a stone through tender procedures. Therefore, we told them: “Here, the government issued an order before the fifth day, so we don’t know anything, we ourselves are in the same situation, you keep in mind.” We told them: "10% of the advance must be transferred, and if you do not complete the transaction, the money becomes the property of the company."
Ulyukaev: Well, of course. It will be important now. There, on the 20th, in Lima, the boss will meet with Abe, this is a must.
Sechin: Yes, yes, I will be in Lima.
Ulyukaev: I will too. And even before that, I meet with this Seko (Hiroshige Seko is the Japanese Minister for Economic Cooperation with Russia. - RBC), there, too, I still need to crush him, the minister of this same one responsible for Russia.
Sechin: Well, yes, yes. Well, I will not say that they somehow began to remove us.
Ulyukaev: Uh-huh, uh-huh.
Sechin: No. They have an intention. They make attempts, they directly told us: “Here, it will be hard for us (inaudible)”. But we immediately told them: “You guys don’t contact us on these issues: we are soldiers – we are told to do what we are.” Lesha, well, thank you very much, I don’t delay, I know you have a difficult schedule.
Ulyukaev: Yes, now I will drop by the courses on the way.
Sechin: Uh-huh, (inaudible).
Sechin: Let's go.
The rustle of clothes, knocks.

Second recorder

Rustle, steps.

Sechin: Will Shokin bring tea?
Unknown: Yes, yes.
Sechin: And a basket there...
Man: Yes, yes!
Sechin: (Unintelligible.)
Unknown: Tea has been brought.
From time to time, faintly distinguishable voices of people, coughing, creaking of doors, sound of steps, phone calls are heard.
Unknown speaks on the phone: Hello, yes? Come on, let me clarify. Everything is fine, drinking tea. Here, simply according to your order, no cars are released from the territory (inaudible). We save the block mode. BUT? Yes, yeah. Everything, I understand, yes, well, there is! Okay, okay, yes, there is! Yes, hello? Everything is fine? In the sense - the regime is preserved? Everyone, come on. Ah, yes, yes, I understand, okay.

The sound of an engine, a phone call is heard.

Unknown speaks on the phone: Yes? Well, here I am, yes, yes, hello, hello ... The car came up. I did, yes.

Motor noise.

Telephone conversation between the head of Rosneft and the minister

First recording device

Unknown: Tell Shokina to put the basket in 206 and make tea.

Paper rustling is heard.

Ulyukaev's courts: how the ex-minister has changed since the moment of detention

Second recorder

Rustle, steps.

Sechin: Will Shokin bring tea?
Unknown: Yes, yes.
Sechin: And a basket there...
Man: Yes, yes!
Sechin: (Unintelligible.)
Unknown: Tea has been brought.
From time to time, faintly distinguishable voices of people, coughing, creaking of doors, sound of steps, phone calls are heard.
Unknown speaks on the phone: Hello, yes? Come on, let me clarify. Everything is fine, drinking tea. Here, simply according to your order, no cars are released from the territory (inaudible). We save the block mode. BUT? Yes, yeah. Everything, I understand, yes, well, there is! Okay, okay, yes, there is! Yes, hello? Everything is fine? In the sense - the regime is preserved? Everyone, come on. Ah, yes, yes, I understand, okay.

The sound of an engine, a phone call is heard.

Unknown speaks on the phone: Yes? Well, here I am, yes, yes, hello, hello ... The car came up. I did, yes.

Motor noise.

At the Zamoskvoretsky District Court of Moscow at the trial of the ex-minister accused of corruption economic development Alexei Ulyukaev, the prosecutor released a recording of his conversation with the head of Rosneft, Igor Sechin, in which the minister allegedly extorted a bribe, TASS reports.

The second recording - Ulyukaev's conversation with an unidentified person in the courtyard of the Rosneft office - was made on the same day, the documents say.

In the printout of the audio recording, the minister does not speak directly about money, but calls a bag of money a basket, sometimes a basket with sausage, Interfax reports the words of prosecutor Boris Neporozhny.

Back in 2015, journalists learned that Sechin became interested in hunting for a large animal and began to make sausage from the resulting meat, which he treats to his friends and partners. It was noted that they process game in one of the Moscow offices of Rosneft. Sausages are made from the meat obtained by Sechin, as well as sausages, sausages and even sausage bread.

The prosecutor read the transcript of the conversation that took place on November 14, 2016 in the inner courtyard of the Rosneft office, very quietly, one of the listeners asked to read it louder, but the judge reprimanded him. As Mediazona journalists managed to make out, Sechin and Ulyukaev discussed shale oil, the oil market, Rosneft, the tax burden, and exploration.

Sechin. Slyness - now to support shale oil.
Ulyukaev. Yes. You cannot stop this process.
Sechin. Well, how...
Ulyukaev. Well, if it falls, what are you? Will you do it at your own expense?
Sechin. Well, yes<...>Lyosha, don't be offended by us for these puffs. I already felt like a storm.

Ulyukaev talked about cooperation with the Japanese, Sechin - about the Koreans and the Chinese, concluding that the Japanese can learn something. "All right, hey," the prosecutor read Ulyukaev's answer, causing the laughter of lawyers and listeners.

The prosecutor highlighted the following fragment intonation:

Sechin. Lesha, well, thank you very much, I'm not delaying you, you have a difficult schedule<...>Well, okay, sit down for a second... Well, first of all, I apologize for the delay in the assignments. We were on a business trip, while back and forth, we completed the volume. Here. Take it, put it down and let's go, here's the key for every fireman.
Sechin. Take the basket.
Ulyukaev. Yes.
Sechin. Goodbye.

Another conversation between Sechin and Ulyukaev took place later that day.

Sechin's receptionist. Igor Ivanovich, I'm connecting you now.
Sechin. Alexey Valentinovich, dear!
Ulyukaev. Igor Ivanovich, how glad I am to hear from you!
Sechin. A lot of questions have accumulated there both on the board of directors and on ...
Ulyukaev. Well, let's discuss it.
Sechin invites Ulyukaev to come to the company's office, as he has a lot to do.
Ulyukaev. Yes, I would love to see the company.
Sechin. I now have big negotiations for two hours, at 16:30 is it possible?
Ulyukaev. Quite.

They make an appointment at 17:00. At 17:30 Ulyukaev was detained with marked banknotes.

After reading this fragment, a break was announced in the court session, then the results of the psychological and linguistic examination were announced. Specialists of the FSB Institute of Criminalistics considered that Ulyukaev's oral speech was recorded on the recordings, and there were no signs of editing.

Sechin signed a statement on extortion of a bribe, the act of transferring money to the FSB opera was executed in the presence of Sechin and General Feoktistov

In addition, the court found out some other details of the detention. As they write, the signatures of Sechin and the then head of the security service of the company, General Oleg Feoktistov, who was declared a witness in court, are under a statement addressed to FSB Director Alexander Bortnikov about illegal actions officials Ministry of Economic Development and giving consent to the investigative experiment.

“Ulyukaev turned to Sechin with a demand to pay an amount of $ 2 million for the promise of patronage and agreement with the deal with Bashneft,” reads the announced materials, which are quoted by TASS.

An act of inspection and transfer of banknotes in the amount of $2 million from Feoktistov to FSB detective Kalinichenko was also presented, the act was executed in the presence of Sechin, Feoktistov and unnamed members of the public.

The first stage of the operational experiment took place in room 381 of the building at ul. Bolshaya Lubyanka, 12: briefing, processing and marking of funds provided by Sechin. The second stage is already in the Rosneft office.

Ulyukayev's car was blocked at the exit from the company's office, the prosecutor announced. The bag with the money was in the trunk, and intensely luminescent traces were found on the hands of Ulyukayev and his driver. Ulyukaev explained the presence of the bag by the fact that it contained good wine donated by Sechin and that he himself did not touch it - he only corrected it.

However, the driver testified that it was Ulyukayev who put the bag in the trunk. Ulyukayev pulled out the key to the bag with the keychain from his pocket, according to him, he received it from Sechin.

The notes to the protocol made by Ulyukaev with his own hand say that he does not remember whether he personally put the bag in the trunk, but touched its handles. He described the basket as a basket "with something".

Ulyukaev's lawyers stated that the materials were not fully disclosed. According to them, it follows from the statements of Sechin and Feoktistov that the demand for money from Ulyukaev was received in Moscow in October. The indictment referred to Laos.

Witness for the prosecution testified that Ulyukaev did not order to delay the deal on Bashneft

A witness for the prosecution, a leading consultant at the Department of Corporate Governance of the Ministry of Economic Development, Yulia Moskvitina, testified in court, who stated that Ulyukaev did not give the command to delay the deal on the privatization of Bashneft.

"There was no such thing that we delayed something or did not answer any letters that came to us. We did not receive such orders," she said in the Zamoskvoretsky court (quoted by Interfax).

She noted that "all formalized procedures during the privatization of Bashneft were observed."

At the same time, Moskvitina testified that Ulyukaev initiated the exclusion of Rosneft from the tender for the purchase of Bashneft shares.

"All deletions, amendments were made directly by Ulyukaev, respectively, he was the initiator of the exclusion of Rosneft from the list of contenders for the privatization of Bashneft," the case file, quoted by RIA Novosti, says.

The witness confirmed that she gave such testimony at the stage of the investigation of the criminal case and she does not refuse her words.

According to the lawyer of the former official Larisa Kashtanova, a total of 30 people have been declared among the witnesses for the prosecution.

The fact that Feoktistov played a role in organizing the arrest of Ulyukaev wrote and earlier. General Feoktistov named Fix was fired from Rosneft, where he headed the security service, in March. Prior to that, he headed the FSB's 6th Internal Security Directorate Service (SSB), nicknamed "Sechin's special forces" because it was created in 2004 at the initiative of the then Deputy Prime Minister, the current head of Rosneft, Igor Sechin.

Sechin himself had previously stated that he had not received a subpoena in the Ulyukaev case and would not go there as a witness.

The former head of the Ministry of Economic Development is under house arrest in his apartment on Minskaya Street in Moscow. He does not admit his guilt and calls the case against himself a "vile provocation."

As part of the case, the court, at the request of the investigation, arrested Ulyukaev’s property - 15 real estate objects and cash in the amount of at least 564 million rubles.