Russia, OPEC vow closer cooperation with annual meetings

Moscow (Platts)--27Dec2005

Russia and OPEC have agreed to hold annual meetings to strengthen energy
cooperation after talks between the OPEC president and senior Russian
officials on global oil market developments, OPEC and Russia's energy and
industry ministry, said in a joint statement Monday.  

     "It was agreed that there would be annual meetings at the ministerial
level, as well as technical exchanges, seminars, joint studies and research,"
the statement said.  

     "In addition to on-going oil market developments, other areas of interest
to the two parties included energy policies, upstream and downstream
investment, data flow, and multilateral issues," the statement added.   

    OPEC president Sheikh Ahmed Fahad al-Sabah held talks Monday with Russian
industry and energy minister Viktor Khristenko, where two formed the framework
for better Russian-OPEC cooperation. "It was stressed that there should be a
pragmatic and sustained process of dialog," Russia and OPEC said. 

     Both Russia and OPEC "have a mutual interest in the predictability and
transparency of all factors affecting the oil market," the energy ministry
said. 

     "The dialog between Russia and OPEC offers an opportunity to provide a
balanced and constructive common perspective of producers on the energy theme
in the Agenda of G8 next year," the ministry said. 

     Sheikh Ahmed met officials in Moscow Monday to coordinate oil pricing and
production policies as Moscow prepares to take the helm of the G8 and amid
worries in the cartel that Russia is taking world market share away from OPEC
countries.

     In an interview published ahead of the meetings, Sheikh Ahmed, who is
also Kuwait's oil minister, said the cartel wanted to coordinate policies more
closely with Russia to support world oil market stability.

     "Of countries that are not in OPEC, Russia is the most important supplier
of oil to world markets," he told the daily Vremya Novosti.

     "But we view Russia today not as a competitor but, on the contrary, we
are hoping for a coordination of forces with your country to maintain
stability in the oil market," Sheikh Ahmed said.

     High taxes and strict ecological policies in Western consumer countries
meant they bore as much responsibility as OPEC producers for high oil prices
of the past year, and Russia's chairmanship of the Group of Eight
industrialized nations could enhance dialogue on this point, he said.

    "Through its chairmanship of the G8, Russia can, at a minimum, explain
the position of fuel-supplying countries to consumers," Sheikh Ahmed said.

     Russia expects that its cooperation with OPEC will help reach "balanced
agreements" and consider interests of both crude producers and energy
consumers, Russia's foreign minister Sergei Lavrov said Monday during the
talks Sheikh Ahmed. 

     The Russian minister noted "a good partnership with Kuwait and good 
cooperation with OPEC" after talks with Sheikh Ahmed, Russia's Itar-Tass
reported. 
    
      RUSSIAN OIL DEMAND TO GROW

      Demand for Russian oil will continue to grow over the coming decade but
OPEC has "no worries" about rising Russian output as it will be absorbed by
increasing global demand, Sheikh Ahmed said in an interview with AFP .

     "We think we have no worries about the future" and increased Russian
crude production, Sheikh Ahmed said following talks with Russian officials.

     "We believe that the markets will accept the whole new production in the
future for that," he said, adding that Russia and OPEC were in a "cooperation
situation, not a competition situation."

     "We believe the demand on the Russian market will increase in the next 10
years and for that all the producers--including Russia--should invest to
increase their production," Sheikh Ahmed said.

		---Anna Shiryaevskaya, anna_shiryaevskaya@platts.com

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