ITAR-TASS, 13.06.2006

Finance ministers of the Group of Eight countries emphasize the key role played by the private sector in providing energy services and associate energy security with fight against poverty

ST. PETERSBURG, June 13. /ITAR-TASS/. Finance ministers of the Group of Eight countries urge the developing countries to dismantle barriers in the way of private companies providing services in the energy sector. This is the message of a special statement adopted at the ministers’ meeting.

“We emphasize the key role played by the private sector in providing energy services; we urge the developing countries to adopt a comprehensible and effective normative basis in order to bring down barriers and ensure the involvement of private sector,” the document points out.

The participants of the G8 ministerial meeting outlined the necessity of a “special focus” of the energy strategies on the poorest countries, while providing the access to modern services in the energy sphere for the most disadvantaged population groups of these countries, and supplying energy resources and electric power to the major social facilities, such as hospitals and schools. The ministers also pointed out the importance of providing greater access to the cleaner kinds of fuel used in households in order to reduce air pollution.

The ministers believe that the greater access to energy resources will contribute to economic and social development, in combination with projects for eradication of poverty and incentives for economic growth. In this connection, the ministers of the Group of Eight urge national governments and donors to include energy aspects in their projects for partnership and eradication of poverty.

G8 finance ministers urged energy producers and consumers to stimulate investments in the energy sector and noted the necessity of improving energy effectiveness, including through implementation of national initiatives, and to ensure greater transparency and reliability of information in the energy market.

Certain ministers deemed it necessary to elaborate on the energy subject at press conferences held after the meeting. For instance, French minister of economics, finance and industry, Thierry Breton, forecasted that by 2030, the energy producing countries would invest up to $17bn in the development of infrastructure, including $6bn in the oil sector. While dwelling on the issue of high oil prices, Breton supposed that “the speculative component currently accounts for $20 to $30 of a barrel price.”

Breton confirmed France’s willingness to invest in the development of Russia’s infrastructure and energy sector. “No access to Central Asia’s resources is available actually, and in this connection we consider important to provide the transit across Russia,” he said.

German finance minister, Peer Steinbruck, praised Russia as a reliable energy supplier. He noted that Russia paid great attention to the reliability of energy supplies. He admitted that the situation that had occurred between Russia and Ukraine around gas price increase in December 2005 was not quite correctly construed in Europe. “Today, a progress is obvious in Russia in ensuring reliable energy supplies,” the minister stated.

The Russian finance minister, Alexei Kudrin, pointed out that Ukraine had violated the principles of the Energy Charter, which was ratified by it. “As a transit country, Ukraine siphoned off gas without any authorization,” Kudrin said and expressed his surprise at the absence of response to this issue in the European countries.

Kudrin described long-term contracts and more reliable forecasts in the energy consumption markets as the basis of energy security. He noted that “an unplanned growth of energy consumption was observed” even in “such a centralized economy as China”.

According to Kudrin, it is necessary to open access to information on the energy strategies of oil producing and oil consuming countries. Answering the question about possible gas shortage in future due to slow growth of Gazprom’s investments in gas production, the Russian minister emphasized that “the issue was not formulated in this way, nor was it discussed in this aspect at the meeting of G8 finance ministers.”

Kudrin also pointed out that there was no need to expand the Group of Eight. He said that the attendance of the G8 meeting by the representatives of six non-member countries was caused by the necessity to make the discussion of the key global issues more profound, however, this fact should not be regarded as “an invitation to join the group”. In particular, the minister pointed out the necessity of participation of such countries as India, Brazil and China in the discussion of the problems.

Kudrin announced that the autumn G8 finance ministers’ meeting would be held in Singapore. “Such meetings are traditionally chaired by the finance minister of the nearest G8 country,” Kudrin said. “All indications are that it will be Japan.”