News / Economy

Putin Pushes Russian Agenda at Global Gas Summit

Russia's President Vladimir Putin speaks during a news conference, part of the Gas Exporting Countries Forum (GECF), at the Kremlin in Moscow, July 1, 2013.
Russia's President Vladimir Putin speaks during a news conference, part of the Gas Exporting Countries Forum (GECF), at the Kremlin in Moscow, July 1, 2013.
Reuters
President Vladimir Putin has defended the long-term supply deals under which Russia exports its gas and warned that abandoning them would undermine global energy security.
 
Putin won the backing of strategic allies at a summit of gas exporters in an ornate hall in the Kremlin on Monday, but the gathering exposed divisions over the challenge that flexible liquefied natural gas (LNG) poses to Russia's pipeline gas supplies.
 
The Russian leader has, since he first became president in 2000, deployed state gas export monopoly Gazprom to project geopolitical power and restore prestige lost with the Soviet Union's collapse.
 
But with a growing flotilla of tankers supplying LNG to world markets, the long-term export contracts that tie the price of Russian gas to oil, and set minimum purchase requirements for buyers, have come under threat.
 
Putin said that loosening the oil-price link or scrapping contractual 'take-or-pay' clauses would eventually lead to higher costs, not only for producers who need price security to justify long-term investments, but also for buyers.
 
“What we are talking about, above all, are attempts to dictate economic terms that are unacceptable to producers of gas delivered by pipeline,” Putin told leaders from the 13-member Gas Exporting Countries Forum (GECF).
 
“Unfortunately, the advocates of such a policy do not understand that abandoning the fundamental principles of long-term contracts would not only inflict a blow on gas producers but also bring with them significant costs,” he said.
 
Putin hit out at the European Union, where energy market reforms under the Third Energy Package threaten Gazprom's control over the gas supply chain from wellhead to consumer.
 
Gazprom's loss of pricing power in Europe, which accounts for more than half its gas revenues, has driven down its market value to $78 billion from $360 billion in 2008.
 
Analysts say that supply fundamentals - gas is abundant while oil is relatively scarce - will make it hard for Gazprom to uphold an export-pricing model that dates back to the Soviet era.
 
Gazprom's export monopoly is also under threat from reforms that would allow Russian rivals such as Novatek and Rosneft to export LNG. Energy Minister Alexander Novak said that the necessary legislation would be passed and take effect this year.

Conditional support
 
Putin, who began his third term as president in May 2012, has set out to defend Russian interests on the world stage as he tries to reassert his authority after the biggest protests since he first rose to power.
 
He won support on gas pricing from Venezuelan President Nicolas Maduro, Bolivia's Evo Morales and Abdelkader Bensalah, chairman of the Algerian Senate.
 
But the energy minister of top LNG exporter Qatar said that each member of the group has its own point of view on the development of the sector.
 
“We should remember that our pricing policy should also be derived from the interests of consumers, not only of producers,” Mohammed Saleh al-Sada told the summit, broadcast live on Russian television.
 
The GECF, holding its second summit, says that its members control 80 percent of world gas output and 70 percent of LNG production.
 
In reality, many of its members are net importers, leaving Russia and Qatar as the biggest players on international markets. They now face potential challenges from the United States, which has overtaken Russia to become the world's largest gas producer, and Australia, which is expanding into LNG.
 
Founded more than a decade ago, the GECF drew comparisons with the Organization of the Petroleum Exporting Countries but failed to show the type of cohesion that has made the oil export cartel capable of influencing global crude markets.
 
“We don't want to create a cartel,” Putin later told reporters. He said that Russia had won support from “all” GECF states for oil indexation, also expressed in a joint communique.

Yet Putin's remarks showed little appreciation for the positions of some other members, reinforcing the impression that the GECF - headed by Russia's Leonid Bokhanovsky - is a vehicle for Moscow to lobby its own agenda.
 
Also hindering cooperation are simmering tensions between Russia and some Gulf Arab gas producers over Putin's support for President Bashar Al-Assad in Syria's civil war. Qatar supports the Syrian opposition.
 
The GECF comprises Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela. Iraq, Kazakhstan, the Netherlands and Norway are observers.

You May Like

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violencei
X
Lenny Ruvaga
November 27, 2014 7:05 PM
The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8016
JPY
USD
117.76
GBP
USD
0.6340
CAD
USD
1.1268
INR
USD
61.850

Rates may not be current.