Finance chiefs from the world’s leading industrial nations kick off two days of discussions in Moscow on Friday focused squarely on mounting Western concern over the Kremlin’s swelling clout in world oil and gas markets.
Taking its first turn at the helm of the Group of Eight (G8), Russia has set a diverse agenda for the meeting that will include talk about world trade, debt relief for poor countries, fighting infectious diseases and terror financing.
As host to its seven G8 partners — Britain, Canada, France, Germany, Italy, Japan and the United States — Russia has also invited emerging giants Brazil, China, India and South Africa to talks alongside the G8 discussion.
Attention during the two days of meetings that begin with a Kremlin dinner on Friday will centre on issues likely to be taken up by the G8 leaders at their annual summit in July in Saint Petersburg.
Discussion of more technical issues such as currency-market regulation traditionally addressed by G7 finance ministers — Russia does not take part in these talks — will be avoided altogether this weekend, a device to avoid excluding Russia from portions of meetings it is hosting.
Chief among the issues to be addressed by the ministers in their Moscow talks is ”global energy security”, the topic that Russia, a fast-growing world energy giant, has singled out as the top agenda item for its year-long G8 presidency.
The meeting wraps up on Saturday when President Vladimir Putin hosts the visiting ministers at a Kremlin lunch.
Russia made clear last year it would use the G8 discussion process to promote itself as a dependable energy partner with large reserves to supply world markets concerned by Middle East volatility.
What Moscow may not have foreseen was the consequences of an ugly dispute with Ukraine on pricing for Russian gas supplies that marked the start of its G8 presidency early this year.
That dispute resulted in supply disruption to clients further downstream in Europe. That, coupled with Moscow’s reassertion of state control over energy resources, is raising Western concern over its dependence on Moscow for energy and Kremlin linkage of energy to politics.
And this concern will be aired at this weekend’s G8 finance ministers’ meeting where, according to the Financial Times, France and others intend to offer Moscow financial incentives to liberalise its gas industry.
Russia, which spans the globe between Europe and Asia and has hungry markets to both east and west, holds a lot of cards and will not easily be pushed on the issue. Its customers in Asia and Europe are eager to diversify energy supply away from the Middle East.
Quoting an unnamed ”Western energy diplomat”, the Financial Times said any moves aimed at pushing Russian state-controlled energy giant Gazprom to ease its monopoly grip on Russia’s gas-pipeline network are ”wishful thinking”.
Russia confirmed as much on the eve of the talks, with Finance Minister Alexei Kudrin saying Moscow is prepared to ratify an energy charter aimed at facilitating its gas flow to Europe, but he was unable to say when it will actually do so.
The charter, drafted in 1991 by the European Union’s executive commission, aims to improve energy cooperation between the EU and Eastern Europe and the former Soviet Union. Russia has signed the text, but has yet to ratify it.
The fast-widening scope of the West’s concerns on Russian energy became more apparent on Friday when the topic was broached at informal talks between Nato and Russian defence ministers in Italy.
A Nato official, speaking on condition of anonymity, said Russian Defence Minister Sergei Ivanov had appeared surprised the gas issue was raised in the meeting at Taormina in Italy, and questioned whether the alliance was the right forum to discuss it.
Another said: ”There has been a concern in the US government about the apparent use of energy policy for applying political pressure.” — Sapa-AFP