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#7 - JRL 7224
June 16, 2003
Putin awards world's first energy prizes

On Sunday President Vladimir Putin hosted the first ceremony of the Global Energy Award, the first international prize for research and development in the energy sphere, instituted by Russia this year. The ceremony was held in the magnificent Marble Hall of the newly renovated Konstantinovsky Palace in St. Petersburg, the Russian leaders hometown.

The first winners of the prize were Vice President of the Russian Academy of Sciences Gennady Mesyats, Professor Nick Holonyak of the University of Illinois, and Vice President of Titan - Pulse Sciences Division Yan Douglas Smith. The event was attended by top executives from Russian and foreign energy firms, and, quite unexpectedly for the organizers, the informal exchange of greetings and compliments turned into a serious dialogue resembling the Russian-EU summit held at the same venue recently.

The Global Energy Award was established by Russia this year to mark outstanding developments in the energy sphere. According to the Kremlins information department, the prize will be awarded annually, as of this year. Although the prize was established in Russia, citizens of any state can be awarded. The awards committee includes leading scientists and experts from all over the world, members of international scientific organisations, including Nobel Prize winners in various fields.

Global Energy aims to stimulate theoretic and applied scientific research in the energy sphere, involve the world's leading specialists in tackling the most crucial energy-related problems, and to provide international public esteem for the role of scientists and scientific groups, the presidential press-service said in a statement released at the end of last year.

Several Nobel Prize winners, including the first Soviet President Mikhail Gorbachev and the renowned physicist Zhores Alfyorov, as well as a number of senior executives from major oil firms, attended the first Global Energy Award ceremony on Sunday. The events sponsors, Gazprom CEO Alexei Miller, chairman of the national power grid monopoly RAO UES of Russia Anatoly Chubais and YUKOS chief Mikhail Khodorkovsky who provided nearly $900,000 to stage the ceremony were also present.

Next to Vladimir Putin was seated Valentina Matviyenko, his envoy to the Northwestern Federal District. Remarkably, Vladimir Yakovlev, the controversial St. Petersburg governor, who many believe will soon lose his post, did not attend. His absence only added fuel to the rumours of his imminent resignation.

Addressing the guests at the ceremony Vladimir Putin spoke of the importance of the international Global Energy Award, saying it was the prize of the new millennium, and it is quite logical that namely Russia, one of the world leaders in the energy market, had established it.

Nobel Prize winner Zhores Alfyorov, one of the organizers of the ceremony, then took the floor. The scientist who is at the same time a member of the Communist faction in the State Duma thanked the sponsors Alexei Miller and Mikhail Khodorkovsky for the assistance their companies render scientific research, which in the long run will make those companies redundant (evidently, alluding to the use of solar energy).

After the awards ceremony Vladimir Putin invited the foreign guests to take the floor. Head of the supervisory board of Ruhrgas and E.ON, Wulf Bernotat, representing Germany, read out his address, only once raising his eyes from his notes to say: ''Unfortunately, the practice in Russia is not such as to enter into long-term contractual relations.''

This caused a stir among the Russian audience, with Putin raising his eyebrows in surprise, and Chubais, Miller and Khodorkovsky animatedly whispering among themselves.

The Russian president, however, ignored Herr Bernotats remark and gave the floor to Gaz de Frances Pierre Gadonnet. In his statement Mr. Gadonnet said that Russia must not increase energy prices without good reason. Thus, gradually, the informal event in the Konstantinovsky Palace began to evolve into a rather more serious debate between Western energy businesses and the Russian leader.

Vladimir Putin only shrugged his shoulders and retorted that Russia itself is not interested in higher energy prices, since, in the long run, the producers themselves would suffer the consequences.

Senior vice-president of Exxon-Mobil Rex Tillerson said that in the near future oil production will need to be increased by 18 million barrels per year. ''And still this is only 0.5 per cent of the requirements which oil companies will have to satisfy by 2020,'' he added.

The American thanked Russia for its successful implementation of the Sakhalin-I project, in which Exxon-Mobil has been taking part since 1989, having already invested $5 billion and with plans to spend another $7 billion. He then proceeded to the main point of voicing concern over the latest amendments to PSA [production sharing agreements] legislation pertaining to oil production on the continental shelf.

Putin in turn thanked Exxon-Mobil for its commitment to the Russian market and explained that those same amendments pursue the goal of creating equal conditions for all market participants, both domestic and foreign.

Vladimir Putin recalled that during the Sakhalin-I project talks Exxon-Mobil proved itself a rather uncompromising negotiator, though, in the end the parties managed to work out a deal. Besides, Putin added, certain privileges may be granted to investors who run greater risks. In the new stable Russia practically no one is at risk, he added.

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