Leaders reach Saudi- Russian accord on oil

  • 2003-09-11
  • Bernard Besserglik
AFP MOSCOW - Saudi Arabia's de facto ruler, Crown Prince Abdullah bin Abdul Aziz, wound
up a historic three-day visit to Russia last week in which the world's two
largest oil exporters signed a key cooperation agreement.
The visit, the first by a Saudi ruler since 1926, marks a strategic
rapprochement between two countries, which between them control a
substantial proportion of the world's hydrocarbon resources.
With Saudi Arabia sitting on approximately a quarter of the world's known
oil reserves and Russia acting as the biggest exporter of oil outside the
Organization of Petroleum Exporting Countries, the two producers' combined
weight enables them to exercise a predominant influence on global oil
prices.
Saudi Oil Minister Ali Ibrahim Naimi noted on Sept.3 that the current state
of the oil market served as proof of the two countries' success at keeping
it stable.
His Russian counterpart Igor Yusufov agreed. "We feel ourselves responsible
for the world market's stability. So the signing of our cooperation accord
was quite timely," he said.
The framework five-year oil and natural gas cooperation accord signed Sept.2
could lead to deals worth up to $25 billion, he noted.
The business daily Kommersant said that Saudi investment in Russia resulting
from an improvement in relations "could lead to a huge leap forward for
Moscow" in the energy sector.
Moscow is angling for a share in the development of Saudi Arabia's huge
reserves and also seeking investment in its own oil and gas industry.
Officials in Moscow were at pains to ensure the pact was not seen in
Washington as a deal by Russia and Saudi Arabia aimed at securing control
over the international oil and gas market.
"It does not look like we are talking about an anti-American plot. At least,
Moscow is doing everything it can to make sure that this is not [how it] is
being interpreted by our Western partners," Kommersant reported.
The visit also signals a marked improvement in relations between Russia and
Saudi Arabia after several decades of cooled interactions ­ which some
attribute to Saudi mistrust regarding Moscow's ambitions in the Islamic
world, most notably with the Soviet intervention in Afghanistan.
Recently, Russia has accused Saudi Arabia of turning a blind eye to local
Muslim charities' funding of Chechen separatists.
Moscow only reopened its embassy in Riyadh in 1991, and even in 2002 trade
between the two countries was still worth less than $67 million, the
ITAR-TASS news agency reported.
However relations have improved gradually, and Saudi Arabia's estrangement
from the United States over the Sept. 11 attacks -- in which most of the
attackers proved to be Saudi nationals -- appears to have accelerated the
process.
The global fight against terrorism topped the agenda at a Sept.3meeting of
the countries' two foreign ministers, Igor Ivanov and Saud al-Faisal, where
they pledged to work closely to overcome the threat.
The ministers announced the creation of a working group "to prepare
effective measures to eliminate this dangerous evil."
The Chechen issue was not mentioned in public, but the Izvestia daily said
that the Saudi ruler had promised to take action against the Muslim
charities accused of funding the separatists.
Russian officials have stressed the importance of the Saudi visit as a key
step in Moscow's wide-ranging approach to better relations with the Islamic
world, highlighted last month when President Vladimir Putin said Russia
planned to join the 57-nation Organization of the Islamic Conference.
Riyadh will back Moscow's application to become an affiliate member, a
Russian diplomat told Interfax on Sept.4, citing the "understanding"
expressed by Saudi officials.