Is Russia promoting a gas OPEC?

27 December 2008

Russia is increasingly taking steps to reassert itself as one of the world's superpowers. Last Tuesday, under Russia's guidance, energy ministers from 12 of the largest gas exporting countries in the world met in the Russian capital to sign a charter to synchronize investments and try to stabilize prices.

The group, which some have likened to the oil cartel Organisation of Petroleum Exporting Countries (OPEC), will be called the Forum of Gas Exporting Countries and will be headquartered in Doha, Qatar. The forum will meet next year to elect a secretary general.

Presently, the members are Algeria, Bolivia, Brunei, Egypt, Equatorial Guinea, Indonesia, Iran, Libya, Malaysia, Nigeria, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela. Kazakhstan and Norway are observers. However, several of the leading producers of natural gas like Canada, the US and the European Union are not members.

Even though Russian Energy Minister Sergei Shmatko said the forum won't seek to fix output and that it isn't to be associated with OPEC, believers are few. Venezuela's Energy Minister Rafael Ramirez said there were the similarities between OPEC and the newly formed gas forum. "We see this forum as an opportunity to build a solid organization, which has in its foundation the same principles that gave birth to OPEC," he said.

Consumers in Europe and the US have been opposed the creation of a gas cartel due to concerns over pricing fixing and security supplies. Observers have been watching closely since October, when Russia, Iran and Qatar formed a working group, the Gas Exporting Countries Forum (GECF), to advance the creation of a more formal structure.

The idea of a gas OPEC was first floated by then Russian President Vladimir Putin and backed by Kazakh President Nursultan Nazarbaev in 2002.