VIENNA (AFP) — Russian Vice Premier Igor Sechin reached out to OPEC late Tuesday, calling for greater cooperation between the cartel and his country in a move linked by some analysts to the Georgia-Russia conflict.
Sechin, who is chairman of Russia's biggest Russian oil group Rosneft, said a "draft memorandum of understanding" had been submitted to the Organisation of Petroleum Exporting Countries on closer cooperation between Russia and the group.
"Cooperation with OPEC is one of the priorities of Russia," he said, according to a statement read out at the opening of a meeting of OPEC's 13 members here.
He underscored that OPEC powerhouse Saudi Arabia and Russia were the largest oil producers in the world -- they are number one and two measured by output -- and referred to the "ambitious potential" of cooperation with the cartel.
The timing of the visit to OPEC by such a senior Russian official is likely to raise eyebrows in consumer nations as relations between Moscow and the West deteriorate in the aftermath of the Russia-Georgia conflict in August.
Any closer cooperation would vastly increase the market power of OPEC, which already pumps 40 percent of world oil, and would cause worries about the collective influence of the world's dominant oil producers.
British Prime Minister Gordon Brown warned at the end of August that the West would not be held to ransom by hydrocarbon-rich Russia and urged Europe to find alternative sources of power to avoid "an energy stranglehold."
Independent analyst John Hall, who runs an energy consultancy in London, said the move by Russia could be seen as part of a strategy by Moscow to find political allies after its military action in Georgia.
"Russia is under pressure at from the US and European Union and is looking for allies around the world and it would strengthen its position to have an alignment with OPEC," he told AFP.
Russia already has close ties with OPEC members Iran and Venezuela, who are also at odds with the United States. It has also lent support to the idea of a "gas OPEC", causing alarm in the European Union.
David Kirsch, head of the market intelligence service at US-based energy consultancy PFC Energy, said Sechin's appearance was highly significant.
"Sending Sechin here sends a strong signal about cooperation between OPEC and Russia," he said. "The statement is clear that Russia has its legitimate interests and will pursue them in energy markets."
Sechin said part of the cooperation with OPEC would include providing for a "stable pricing environment" for producers and consumers.
An unnamed Russian official quoted by Dow Jones Newswires said the memorandum of understanding would be "a broad framework" for contacts between OPEC and Russia, "reviving" an agreement that existed until 2005.
He said it could take two months to sign, suggesting it could be finalised in October when OPEC representatives come to an international oil conference in Russia.
The official said the proposal came because of "a new team" at the Kremlin, citing the arrival of Sechin as vice premier.
Russia's relations with the West have hit their lowest point since the end of the Cold War, with both sides looking for leverage to influence over each other.
Stephen Shork from The Shork Report, an oil market analysis publication, said Russia's proposal would be looked at "with a great deal of consideration" and said it had to been seen in the context of the Georgia-Russia conflict.
Russia's resurgence under former president Vladimir Putin has been based in large part on the rise in the price of oil, gas and other commodities. Its energy resources are a vital element of its new geopolitical power.
On August 8, Russian tanks and troops surged into Georgia -- a strategic corridor for Caspian Sea oil and gas exports -- to rebuff an offensive by Georgia to regain control of its province of South Ossetia.
A shake-up under new Russian President Dmitry Medvedev moved Rosneft chairman Sechin from a Kremlin administration post to deputy prime minister in charge of energy and industry.
Sechin is seen as the key figure in Rosneft's controversial acquisition of the bulk of dismantled oil company Yukos, whose founder, Mikhail Khodorkovsky, was imprisoned on fraud charges under then president Vladimir Putin.
-- Dow Jones Newswires contributed to this story --
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