The many possibilities in energy dialogue

Updated: Apr 29 2006, 05:30am hrs
Russias energy strategy is coming to the fore on the global agenda, especially in 2006, when we assumed the rotating chair of the Group of Eight (G8) industrialised nations. Global energy security is one of the key issues on the G8 summit agenda. Russia is the biggest oil and gas exporter in the group, with a major influence on the world market situation.

The current situation on the global market has four aspects. First, energy requirements of the emerging Asian countries are growing rapidly (up to 45% of the prospective increment in global oil demand).

Second, the divide between oil and gas consumption and production in the industrialised countries is growing. By 2020, Europe will import 60-70% of its gas requirements; the majority of Asian giants already import more.

Third, this process is compounded by inadequate oil refining and transportation infrastructure and the limited additional possibility of oil production. And fourth, the global trade in black gold is insufficiently transparent.

Taken together, this spotlights energy security as a common problem of reliable energy provision to the worlds nations and, so, a problem of the international community as a whole. The global dialogue on this issue should stipulate the drafting of common approaches to a number of comprehensive tasks, such as stabilisation of energy markets, extended investment into and efficient development of power generation and infrastructure.

At the same time, we should maintain a balance between the development of the power industry and the environment. The issue of climate change, which was one of the two top issues on the agenda of Britains G8 presidency in 2005, is closely linked to that of energy security. Two-thirds of the task of reducing hazardous emissions are connected with the energy sector. We need to find a compromise between environmental problems and the real conditions of economic development, which should take into account the key features of all market players, hydrocarbons producers and consumers.

The economic importance of energy resources is indivisible from its political one. Developments in the Russian energy industry reflect global trends. If you look at the latest restructuring of global oil and gas majors, you will see their names have become longer. Everything is becoming more expensive and more difficult, risks are increasing and to manage new risks and new projects, a company has to be different. This is an objective process that accompanies globalisation. Everything points to our joining the process to the extent we, i.e. companies, are ready to.

The status and opportunities of Russian companies match those of their foreign counterparts. They can hold any talks and make any transactions with their partners, no matter what they are called. This is what we have already achieved. But our companies have to become transnational in the true sense of the word. To attain this goal, they should at least acquire a developed network of projects all over the world. Cooperation with other firms in carrying out these projects will help Russian companies cover major risks.

As to other tools and aspects, we are not members of the Organisation of Petroleum Exporting Countries or the International Energy Agency. However, we are in constant contact with experts of these international organisations. I would like to emphasise that energy dialogue is an established and actively-used form of cooperation. Their conclusions lead to discussions at political, economic and any other levels. Each stage of energy dialogue is backed by certain decisions. These are consequences of different discussion sites.

We have launched a similar dialogue with the largest emerging Asian economies, within the Asia-Pacific framework. Our further cooperation will first of all seek to carry out the initiative of shaping a single system of measuring key aspects in the energy policy. This goal alone, if achieved, will eliminate many of the risks I have mentioned. Russia is willing to mediate the process between all the interested parties.

The writer is Russias minister for industry and energy. Courtesy: Ria Novosti