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An interview with the KhMAO Governor A. Filipenko

Mr. Filipenko, how would you estimate the results of the social economic development of the region in the first half of the year? A.Filipenko: I would say that the results of the region in the first half of the year are positive, according to key social and economic indexes. Thanks to the energy sector, industrial output has increased more than 10 percent. The growth of oil exploration in the region is 10.7%. It has reached 112.5 million tons.

An interview with the KhMAO Governor A. Filipenko

Mr. Filipenko, how would you estimate the results of the social economic development of the region in the first half of the year?

A.Filipenko: I would say that the results of the region in the first half of the year are positive, according to key social and economic indexes. Thanks to the energy sector, industrial output has increased more than 10 percent. The growth of oil exploration in the region is 10.7%. It has reached 112.5 million tons.

Moreover, we could observe growth of other indicators. Income of the people, living in the region, is constantly increasing and social infrastructure is developing. The growth of private manufacturing is more than 60%. One fourth of the new built houses have been constructed in order of individuals. This fact is very important.

Mr. Filipenko, has the government of the region solved all the problems or are there more difficulties?

A.Filipenko: Of course, there are problems. Today is a period of huge government spending. It is connected with preparations for the winter period, with buying necessary resources for the winter, with maintenance works and construction. There has also been a misbalance in taxes. There is a very low inflow of some taxes. But compensation comes from increases in other taxes, for example from the exploration tax on natural resources. However, at the end, budgeted income will be exceeded.

Do you also expect such positive results for the second half of the year?

A.Filipenko: I think we can compensate the 7 billon rubbles deficit in the budget of the region until the end of the year. For the social economic development of the region, it is important that we fulfil our old obligations and meet budget goals. Currently there is a tendency of increasing industrial output. We are going to compensate our deficit with the help of increased oil exploration. I think we really can explore up to 227 million tones of oil, if there is no force majeure.

Almost all large and medium oil companies have increased their financial results. Moreover, we are going to create some additional conditions, also on the federal level, supporting such developments. We also have some new projects that are currently being implemented.

What about other sectors of the economy?

A.Filipenko: It is necessary to support the creation of new industries and more construction work. We should invite those who are going to invest and create new industries. We have to work closer with foreign and state investors. From my point of view, this is the only real way to maintain the level of living standard that we have reached in the previous years. For most of the territories, increasing the tax base becomes more and more important because of changes in the budget and tax legislation that have already been made and will be made in the future.

Mr. Filipienko, what changes should be made in the social sector?

A.Filipenko: Despite our hard work connected with the development of the social system, including education, medical care, culture, we are still far from the wished results.

It is very important to increase social infrastructure - hospitals, theatres, museums, schools and so on. For example, in Nyagan, we have to build three or four schools. Today we are finishing the construction of a very large surgical hospital.

At the end of last year, the KhMAO government entered the market of internal borrowing. As the practice showed, the results of placing two bonded debts are considered successful. Are you going to continue this practice in the future?

A.Filipenko: I hope we will. But what we have already made this year is enough. However, the Yugra government will continue this practice in the future. I think in two or three years, we will be able to speak about a strong system of borrowing that will allow us solving many very important issues.

Are you going to enter the international debt market?

A.Filipenko: We are thinking of this possibility. Maybe in the future.

It is spoken much about claims against oil companies that break conditions of the licence agreements. As KhMAO is the key oil region in Russia, are there any such claims here?

A.Filipenko: I think there are. However, solutions are being negotiated. Such discussions allow implementing many projects. If there are problems, first, the federal legislation has to be applied. But sometimes, the regional governor has to interfere.

Does oil business change its attitude?

A.Filipenko: Today is a period when may companies have changed their attitude towards business. I am talking about some weak points in the legislation that assist irresponsible behaviour. Most of the companies have started solving issues connected with the effectiveness of their business with the help of more productive technologies.

So do you estimate the cooperation with oil companies effective?

A.Filipenko: I would estimate cooperation with oil companies as valuable. We are going to continue cooperation as not all the goals have been achieved. The decision of the Minister of Economy of the Russian Federation, which has already set standards for work on oilfields in KhMAO, will regulated the sector significantly.

Mr. Filipenko, during the reform of RAO "UES of Russia" the region is making its independent company YUTEK (Yugorsk territory electricity company). What do you expect from this project?

A.Filipenko: It would be good if the project guarantees public energy systems independence from different negative impacts during the period of energy reforms. At the same time, such projects as YUTEK should be implemented together with all interested parties, including municipality, energy companies as well as other companies. Currently, the project is under discussion.

The information is provided by the press centre of the second international investment forum "Russia: Oil, Energy, Progress".