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Friday, September 19, 2008

Russia lined up for Opec meeting

19 September, 2008 - Upstream OnLine - Russia will send a high-level delegation to the Opec meeting in Algeria on 17 December, energy minister Sergei Shatko said today. "We are planning again to take part in the meeting by sending a high-level delegation," Reuters quoted Shmatko as telling reporters "The prospects of co-operation in a new format between Opec and the Russian Federation are very interesting." Russia, a major oil producer but not an Opec member, wants to hold a regular dialogue with the group of oil producing countries and has invited Opec representatives to Moscow for a meeting in October. The biggest non-Opec oil exporter, Russia has long attended Opec meetings as an observer, but made the West sit up and take notice by sending its highest level delegation, headed by influential Deputy Prime Minister Igor Sechin, to the September conference. Russia is not expected to join Opec, but has seized an opportunity to pursue its policy of closer ties with fellow producer countries, as well as to irritate the West, analysts told Reuters. Tension has risen between Russia and Western consumer nations, heavily reliant on Russian as well as Opec energy, following Moscow's conflict with Georgia in August. "I don't think they want to be bound by anyone else's rules," said Jonathan Stern of the Oxford Institute for Energy Studies to Reuters. "But...anything that makes the West irritated and nervous is no bad thing (for Russia)." Russia, which in the past has signed up to an agreement to cut its output in line with Opec restrictions, also has a need to keep revenues rising to make up for underinvestment in its oil sector. "Production in Russia is in bad shape," said Antoine Halff of Newedge brokerage to Reuters. "They are in no position to see prices and oil revenue falling further. I see this as a defensive rather than an offensive position."

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