Jan. 11, 2015

HE Rustam Minnikhanov

UAE, Dubai

HE Rustam Minnikhanov

President, Republic of Tatarstan


Rustam Minnikhanov graduated from Kazan Agricultural Institute in 1978 as a Mechanical Engineer and later went to the Correspondence Institute of Soviet Trade (Moscow) as a Commodity Expert in 1986. After this, he became a Doctor of Economic Sciences. Minninkhanov has had a long and distinguished career in many public and private areas, including being an Engineer, Chief Engineer, and Chairman at Saby District Association, Saby Timber Industry Enterprise, and Arsk District Executive Committee. He began his political career in 1996 when he served as the Minister of Finance of Tatarstan. In 1998 he became the Prime Minister, before becoming the President in 2010.

In light of the traditionally strong oil sector in Tatarstan, what emphasis have you put on technological innovation and value-added in the oil and gas sector?

The oil and gas industry is indeed a traditional sector for Tatarstan; we have been working in the oil and gas sector for 70 years. Around 3.1 billion-3.15 billion tons of oil have been extracted so far. In the 1970s, Tatarstan was the leading oil producer in the Soviet Union. For seven years, we had been extracting over 100 million tons of oil a year. Obviously, oil production dropped to 24 million tons after the breakup of the Soviet Union, but now the production is back up to 32 million tons a year. At present, there is one large oil producing company, Tatneft, and 34 smaller oil-producing companies. Tatneft contributes 80% to the total oil output, while another 34 companies contribute the remainder. We are planning to keep production at this level for the next 20 years. Needless to say, the structure of the deposits makes it more difficult to excavate oil. However, modern technologies (such as hydraulic fracturing and enhanced oil recovery [EOR] techniques) allow us to extract oil. Our companies employ state-of-the-art techniques. As for the long term, deposits will not be exhausted for another 20 years at least. Professionals estimate that Tatarstan possesses between 2 billion and 7 billion tons of bitumen deposits. Modern technologies allow for the extraction of crude oil from bitumen deposits. We have already reached 500 tons of oil a day, but that is only the beginning. Apart from that, we're also considering shale oil, or light tight oil, production. Our scientists are currently estimating the deposits. To date, we are refining about a half of total oil output, and until recently it was about 7 million tons a year. In 2010, we commissioned an oil refining plant. Indeed, we plan to increase oil refining to 70%-75% of production. By developing oil refining and petrochemical production, the share of the petrochemical industry in GRP has increased from 19% to around 36%-37% in about seven years.

Tatarstan is well known for its strong industrial development. How do you see technological change influencing Tatarstan's traditional industrial outputs?

I would note here that the world is moving in a new direction, where nanotechnologies allow us to create products with new features. Tatarstan is also moving in this direction. We have created a research center in partnership with RUSNANO and are about to start production processes that employ nanotechnologies, a field that has considerable potential. Over the coming years, the number of companies using nanotechnology will clearly raise. Those already in operation are highly competitive. Moreover, nanotechnology is being studied at our universities, and can be applied to create new materials. For example, we have started a production line for composite materials for the aircraft industry, such as from carbon fiber. Innovative products are among our top priorities. There is a new development program for 2013-2016 that implies significant investments (around RUB18 billion-RUB19 billion) into innovative technologies. Following this program, new nano-based production companies will be established. It is estimated that the output of these companies will reach at least RUB50 billion.

Do you foresee the opening of further foreign trade offices in the years ahead?

It is important to prioritize, and we all need to seek out new markets. We believe that the UAE, and Dubai in particular, is the most innovative location in the Middle East region. We have opened our trade representative there. Until recently, we had considered the UAE as a trading partner, but now we are cooperating in education, healthcare, architecture, urban planning, and SME support, among other areas. I have been traveling to Dubai quite regularly since 1992, and I see impressive changes every year I go there. There is a lot to learn from Dubai. The languages we speak are similar, as we share about 10% of the vocabulary. Therefore, we are interested in developing closer ties with the UAE. To date, the relationships between Tatarstan and the UAE have not been as tight as we would have liked. There are many things to work on, but Dubai's authorities are open, and we would like to make use of such cooperation.