Opening Speech to the OPEC-Russia Meeting

by OPEC Conference President, HE Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, Secretary General & Kuwait’s Minister of Energy, Moscow, 26 December 2005

Excellency, ladies and gentlemen,

It is both an honour and a pleasure to have this opportunity to meet, once again, Your Excellency, to discuss the possibility of taking a major step forward in the dialogue between the Organization of the Petroleum Exporting Countries and the Russian Federation as the largest oil producers and exporters.

Dialogue is no stranger to the relationship between OPEC and Russia.

Over the past decade and a half, OPEC has welcomed the support to its market-stabilisation measures from Russia. Due to the fact that Russia is the world’s second-largest crude oil producer and exporter and that it is the number-one gas producer and exporter, this has greatly enhanced the effectiveness of these measures.

Your commitment has also been demonstrated by the attendance of representatives from your country at many OPEC Ministerial Conferences as observers, sending a strong signal to the world at large about the importance Russia attaches to dialogue and cooperation, particularly involving our Organization.

Furthermore, Russian officials have also made valuable contributions to OPEC seminars and other such gatherings, and, in so doing, added significantly to the international standing of these events.

For our part, we have welcomed the opportunity to participate in Russia’s annual Oil and Gas Weeks, especially since this event has now established itself as a major addition to the international energy calendar, attracting top-level participants from every branch of the oil and gas industry.

As we all know, bilateral contacts already exist between OPEC and Russia, both individually — with our Member Countries — and collectively.

The expressed desire by both OPEC and Russia to establish dialogue on a more formal basis is an almost inevitable consequence of the steady evolution of the OPEC-Russia relationship over the past decade and a half. This began effectively with Russia becoming a major player in the oil market on the world stage, rather than the regional one.

We have seen how effective such a formal dialogue could be through — among other things — the success of the two joint workshops organised by OPEC and the International Institute of Energy Policy and Diplomacy of MGIMO University of the Ministry of Foreign Affairs of the Russian Federation. These provided participants with the chance to take an in-depth look at market issues which were of much topical interest to the relationships between OPEC and its Member Countries and Russia. We very much look forward to hosting the third workshop in Vienna next year.

Given the challenges facing the global energy scene today and our mutual interest in creating a more stable and effective international oil market now and in the future, we seek to take our dialogue a step forward. An enhanced dialogue among producers, in particular between Russia and OPEC will benefit globally both producers and consumers, contribute immensely to market stability and improve energy security. It will assure consumers, especially those in developing countries with rising demand, of assured and reliable oil and gas supplies to fuel their economic development in the twenty first century.

In line with OPEC’s two other achievements in energy dialogue this year, we propose to establish a balanced, pragmatic framework for cooperation, and to develop an ongoing exchange of views at all levels on energy issues of common interest, in particular security of supply and demand. At today’s meeting, we will have the chance to discuss the objectives, scope, modalities, frequency and overall structure of the dialogue, as well as define its themes and areas of mutual interest.

Finally, our meeting today before Russia takes over the Chair of the Group of Eight countries next week is of particular significance. This is because, as a country whose recent history is very different to that of the other G-8 members, as well as one which is such a large producer, exporter and consumer of energy, Russia is in a position to share perspectives on oil issues which have not previously come to the fore within that body. This could ultimately prove to be to the benefit of the energy community at large, consumers as well as producers in both developed and developing countries.

Naturally enough, OPEC Secretariat has recently provided authorities in the Russian Federation, upon their request, with its perspective on major issues and challenges facing the oil industry which we hope you will find useful in the preparation and deliberations on the energy theme currently underway for the G8 Summit. Recognizing the importance of exchanging views on critical oil matters, OPEC is ready to provide any additional constructive input needed to support this process, especially from the point of view of oil-producing countries.

Thank you.