Russian leader, Vladimir Putin, has been dipping his toes in to a lot of pools lately. Between his position on possibly allowing Edward Snowden to seek asylum in Russia and his hosting of the second Gas Summit of the Gas Exporting Countries Forum (GECF) in Moscow July 1, 2013 – it’s amazing that he’s keeping the snow separated from the gas.
The GECF is a global forum that serves as a communication link between energy producers and consumers. Member countries include: Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago, United Arab Emirates and Venezuela. Observer members include: Kazakhstan, Iraq, the Netherlands and Norway.
Putin successfully convinced the countries at the summit to unanimously vote for a Cold War era gas-pricing system called the final joint communiqué. It calls for coordinated efforts to defend the interests of gas exporting countries, and not compromise from pressure of consuming countries.
When the Russian leader came to power in 2000, he made significant reforms to the state gas export monopoly, Gazprom, to restore power that was lost with the Soviet Union’s collapse. The Company holds 15% of the global gas reserves and 78% of Russia’s according to Gazprom.
Also on the agenda of the summit was the European Union legislation, the Third Energy Package. Ultimately it aims to break up monopolies and allow European consumers to choose between different suppliers and all suppliers and to access the market regardless of size. This legislation has threatened Gazprom by driving down its market value to $78 billion from $360 billion in 2008 according to Voice of America.
The GECF summit also discussed European Union legislation known as the Third Energy Package. According the European Commission, this seeks to allow “European consumers to choose between different suppliers and all suppliers, irrespective of their size, to access the market.”
The regulating package, which was adopted in 2007, attempts to separate ownership and distribution of gas pipelines in order to break up monopolies. For Russia, however, it further threatens Gazprom’s market value, which now stands at USD 78 billion, compared with USD 360 billion five years ago.
Putin spoke out against the package, regarding it as a discrimination and threat to gas suppliers.
“I’m talking above all about changes in European Union energy regulation and law, the so-called Third Energy Package. The enactment of this gas directive seriously restricts the activity of traditional gas suppliers to the EU market,” Putin said according to Asharq Al-Awsat.
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