With OPEC floundering, Russia steps into breach

IEA calls out for more supply, resists OPEC calls for gas cartel

Russian Deputy Prime Minister Igor Sechin: OPEC "is not that big"
Russian Deputy Prime Minister Igor Sechin: OPEC "is not that big"

Following OPEC's failed meeting on 8 June, Russia is increasing it's profile as an oil exporter, with the support of the International Energy Agency (IEA).

The IEA's Executive Director, Nobuo Tanaka, extended a plea to Russia and OPEC to join in increasing production to alleviate the danger of failed economic recovery in consumer countries.  Speaking to the London Observer,  Tanaka said "we all really have a common interest. You cannot take oil in isolation from gas security, energy efficiency and electricity from renewables".

"The issues of energy security and climate change need to be tackled collectively and we think Russia and other key producers can learn a lot from [the IEA's] experience," he added.

The situation has been made more urgent due to the decreasing likelihood that the use nuclear energy will accomodate more than a small percentage of future energy demand growth. The IEA originally believed 14% of all electricity would be generated by nuclear plants by 2035. Now it believes the figure will be just 10%.

Russia has responded by urging cooperation in the development of new fields, following failed negoations between Rosneft and several international oil companies (IOCs).

Russia's powerful Deputy Prime Minister and oil chief Igor Sechin warned against reliance on OPEC's capacity to ramp up production in times of need.

"We wish Opec lots of success," Reuters quoted Sechin as saying - perhaps sardonically - after speaking to an audience which included oil majors, Tanaka and Iraqi oil minister Abdul-Kareem Luaibi, who opposed Saudi Arabia's push to boost production.

"OPEC does not have as much spare capacity, is not that big, and we need to open up new fields, and we need to cooperate on that," Sechin added.

"Development of the next generation of resources in Russia is important to Russia but not only to Russia; it is important to the world energy supply but not only to the world energy supply," Reuters quoted HIS Cera chairman Daniel Yergin as saying.

Russia has the capacity and the will to ramp up production, but needs billions of dollars of foreign investment to do so. Rosneft has tried to strike mega-deals with a succession of IOCS without success.

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