Summit Notebook

Exclusive outtakes from industry leaders

Note to OPEC: Siberia not Saudi

-    An episodic courtship between Russia, the world’s second largest oil exporter and its sometime rivals in the OPEC group of oil exporting nations, went cold at the beginning of this year when Russia failed to make good on hints that it might cut output in line with OPEC, dominated by Saudi Arabia and other desert states of the Middle East.     Prices for oil, the economic lifeblood of Russia and OPEC countries alike, had fallen below $40, OPEC argued, and supply cuts had to be made to boost prices and finance investment into the oil industry.     Alexander Medvedev, deputy chief executive of Russian energy giant Gazprom, told this year’s Reuters Russia Investment Summit that Russia had an excuse for avoiding the multimillion barrel cuts imposed by OPEC: the Siberian chill .    “It is a very simple explanation for this: We are not in a desert where it’s easily to regulate, we are in an extreme situation in Siberia where reserves could be damaged if you up and down your production levels.”     If Russia shuts down Siberian wells, its industry members argue, they could seize up forever as they go cold.     And Russia hardly left OPEC hanging, Medvedev argued: The financial crisis took its toll even on Russia’s cash rich oil companies: “Actually the supply was substantially lower in the first half of the year.”       Medvedev also said he was still struggling to understand where from the rival Nabucco pipeline will get its gas to rival Gazprom on European markets.      “Even at the (Nabucco) signing ceremony I looked at the photos and tried to find any gas supplier and with all my attempts I could not find any. And it looked strange.”

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