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Brown to allow oil producers to invest in UK’s energy sector

Brown to allow oil producers to invest in UK’s energy sector
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First Published: Sun, Jun 22 2008. 10 22 PM IST

Firm steps: British Prime Minister Gordon Brown. Talks are on about a joint energy fund with Qatar and the Abu Dhabi Investment Authority.
Firm steps: British Prime Minister Gordon Brown. Talks are on about a joint energy fund with Qatar and the Abu Dhabi Investment Authority.
Updated: Sun, Jun 22 2008. 10 22 PM IST
Jeddah: British Prime Minister Gordon Brown said on Sunday that he will open the UK’s energy industry to investment from oil producing nations as a way of keeping a lid on crude prices and paying for measures to clean up the environment.
The UK is talking to the Abu Dhabi Investment Authority about new investments and with the government of Qatar about a joint energy fund, Brown said here. Saudi Arabia agreed on Sunday to work on carbon capture and storage facilities valued at $2 billion (Rs8,600 crore), and the UK government is poised to approve a $1.6 trillion offshore wind farm that Norway’s state-owned StatoilHydro ASA plans to build, Brown said.
Firm steps: British Prime Minister Gordon Brown. Talks are on about a joint energy fund with Qatar and the Abu Dhabi Investment Authority.
The initiatives are part of a “new deal” Brown proposed to oil producing nations on behalf of the 27-nation European Union. He wants nations that have reaped more than $3 trillion from a surge in oil prices to recycle those funds into Western nations in exchange for stronger trade links.
“Britain and other oil consumers should open our markets to new investment from oil producers,” Brown said on Sunday in a speech here. “In this way we can move from the old conflict of interest between producers and consumers.”
The remarks are an attempt to set a new tone for Western relations with oil producers that are coloured by memories of the oil shocks of the 1970s.
Two years ago, when Russia’s OAO Gazprom was considering taking a stake in the Centrica Plc. pipeline company, the UK government bristled, saying any bid would face rigorous tests about how it affects the nation’s energy security. Brown told a press conference here that investors would still have to ensure “the security issues and all the safety issues are met”.
In London, the Conservative opposition dismissed Brown’s remarks as “grandstanding”. “High fuel bills are causing massive pain and have only been made worse by Labour’s economic failure,” Conservative member of Parliament Alan Duncan said.
Brown also met Saudi King Abdullah on Sunday and offered to host a follow-up meeting with producing and consuming nations in London later this year. He met with Saudi crown prince Saud, the defence minister, to discuss regional issues, and China’s delegation.
Higher prices have touched off protests by motorists in Britain, France and Spain. Brown, the most senior Western leader attending the meeting with oil producing nations in Jeddah on Sunday, set out a more cooperative tone with nations in the region, talking about “common interest” in the “stability” of the energy markets.
“What we’ve got is an agreement here, possibly for the first time, that oil prices are too high,” Brown said at a press conference here. “This is the biggest problem we have in the world at the moment. The producers themselves say the high price of oil is detrimental.”
Western leaders are at odds with producing nations about the cause of a surge in the price of crude. While Brown and the International Energy Agency say the world needs more supply, producers blame speculators, a drop in the value of the dollar and wars in Iraq and Afghanistan for spooking the market.
The Organization of Petroleum Exporting Countries itself is split about what to do. Saudi Arabia, supported by Kuwait, plans to pump more to blunt a price it says is too high. Iran, Venezuela and Libya have said there’s sufficient supply in oil markets and the causes of rising prices are elsewhere.
Brown also told the producers that the UK is determined to wean itself off its oil dependence, expanding its nuclear power industry and developing wind and other renewable forms of energy.
Bloomberg
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First Published: Sun, Jun 22 2008. 10 22 PM IST