Tuesday June 27, 2006

Russia initiates SCO energy club

peakoil.com -> en.rian.ru :

Russian President Vladimir Putin's proposal to set up an energy club within the Shanghai Cooperation Organization, voiced at the SCO summit in Shanghai, has been met with alarm in the West. Concerns have been expressed that a gas analogue of OPEC may appear in the East. The SCO's oil resources are not overly significant: even with Iran, they do not exceed 20% of the world's total. The situation with gas is different: the gas reserves of Russia, the Central Asian states, and Iran make up more than 50% of the world's proved reserves.

Is Russia really trying to set up an OPEC analogue within the SCO? Hardly. First of all, it is now too busy supplying energy westwards. It has quite a few long-term contracts, and their number will grow. Secondly, setting up an OPEC analogue is difficult from political, economic and organizational points of view. Russia is hardly willing to assume such a burden, even despite its leading role in global gas supplies.

Oil and gas exporters within the SCO are competing for promising markets, such as China and other dynamically developing East and South Asian nations. To coordinate moves, the organization needs the energy club proposed by President Putin. Its principal difference from OPEC will be that it will unite both energy producers and key consumers, i.e. China, India and Pakistan.

(2006-06-27 12:42:58 SGT) [Energy] Permalink

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