INSIDE WORD ON GAS CARTEL

The Mafia also denies it is an organized criminal business.

Russian Minister: Gas Exporting Countries Plan to Form Gas-Pricing Group
April 9, 2007 (AP via Yahoo Finance)

WHO
16 Natural gas exporting countries as represented by Russian Industry and Energy Minister Viktor Khristenko

WHAT
Plans to create an OPEC-like pricing group for natural gas among the 16 nations that control 70% of world natural gas supply. Percent of world energy: oil—36 percent, coal—26 percent, natural gas—23 percent.

WHEN
Talks took place at a conference on natural gas in the first week of April. Talks about a cartel began in January between Russia and Iran.

WHERE
The 16 countries include Russia, Iran, Qatar, Algeria, Brunei, Indonesia, Malaysia, Norway, Nigeria, Oman and Turkmenistan.

WHY
Control of production levels and pricing gives resource-owning countries economic stability and leverage in world commodities markets. Such control is likely to be more difficult to create than OPEC because natural gas prices are set by contract far in advance and natural gas is not as fungible as oil.

QUOTES
- Khristenko: "Russia is ready to be the one that will carry out research into the problem of price formation for gas…"
- Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies: "It makes sense for gas exporters to re-examine why the price of gas is linked to oil prices…"
- Qatar Minister of Petroleum Abdullah al-Attiyah: "I hate the name cartel. We are not a cartel…We're just here to consider our interests…The West is reacting negatively…They should sit with us and discuss this with us before imposing any regulations on us or any new taxes."