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UPDATE 2-Russia hosts gas group, faces OPEC ire over oil

Tue Dec 23, 2008 10:15pm IST
 
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By Katya Golubkova and Amie Ferris-Rotman

MOSCOW, Dec 23 (Reuters) - Russia, the world's top gas exporter, hosted a meeting formalising cooperation between major gas producers on Tuesday but faced criticism from OPEC for refusing to join in cutting oil output to support energy prices.

With Prime Minister Vladimir Putin presiding, energy ministers from 12 gas exporting countries, many of them OPEC members, agreed to transform an existing gas forum that they said could benefit consumers and would not control output or prices.

The event, partly meant to increase Russia's clout in global energy diplomacy, did not go smoothly for Moscow.

Concern about falling prices and flagging demand quickly surfaced as country representatives said Russia should have sacrificed some of its own output to back up President Dmitry Medvedev's promise to support OPEC oil production cuts.

The Kremlin's critics said an important way to help gas prices is to bolster the oil price, which they reflect.

"We needed to redress the situation to the market of oil so as to redress the situation in the gas market," Libya's top oil official, Shokri Ghanem, told the ministers.

"We are still waiting for a declaration from the Russian Federation that they are cutting their (oil) production not only to support the (oil) market, but also to support the gas market," Ghanem said.  Continued...

Russian Finance Minister Alexey Kudrin poses with his G20 colleagues and central bank leaders during the family photo at the G20 Finance Ministers meeting at a hotel in St. Andrews, Scotland. REUTERS/POOL New
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