| ST PETERSBURG, Russia
ST PETERSBURG, Russia Russia, keen to parlay credentials as the world's top oil producer into new investment in its offshore oil riches, told investors on Friday the best guarantee of supply was cooperation on new fields.
Following the collapse of OPEC talks on a potential supply increase to help struggling consumer economies, Russia's powerful oil tsar Igor Sechin warned against reliance on the the oil club's capacity to ramp up production in times of need.
"We wish OPEC lots of success," Sechin said after speaking to an audience which included oil majors, the head of the International Energy Agency and Iraqi oil minister Abdul-Kareem Luaibi, who opposed Saudi Arabia's push to boost production.
"OPEC does not have as much spare capacity, is not that big, and we need to open up new fields, and we need to cooperate on that."
In contrast to OPEC Secretary General Abdullah al-Badri's protest that the IEA was brandishing a "weapon" against OPEC by vowing to protect consumers from high prices with access to oil reserves, Sechin cracked a joke.
"Maybe the consumers could grant us some access," he told reporters on the sidelines of the St Petersburg International Economic Forum, Russia's answer to Davos.
STRUGGLE TO GROW
Though it has, in times of low prices, curried favor with OPEC with hints it might fall in line with output cuts, the realities facing Russia's oil industry stand in contrast to those of its rival for the title of top producer.
While debate around Saudi Arabia centers on the true volume of its spare capacity, Russia is faced with difficult questions about how it can stanch declines in the Soviet-era Siberian oil heartland and coax capital-intensive new fields into production.
"Development of the next generation of resources in Russia is important to Russia but not only to Russia; it is important to the world energy supply but not only to the world energy supply," said Daniel Yergin, chairman of IHS CERA.
"It is of critical importance to world energy security and as such it is important to the security of all nations in the global community."
Russia's ability to develop its new resources -- located in ever more remote, ever less hospitable territories, many of them offshore -- will depend on its ability to secure hundreds of billions of dollars to fund ever more expensive drilling.
That is a tough task, given scarce precedent for financing projects of this length and scale in an emerging economy with a patchy record on investor rights.
Still, recent shocks to the energy industry have given Russia the appearance of a safe bet.
"Uncertainty in the Middle East focuses attention again on Russia's role as the largest producer and second largest exporter as well as a source of massive natural gas, its critical role in the world's energy security system," Yergin said.
LINING UP FOR RESERVES
As for investors, their appetite for Russia's reserves has scarcely diminished with the latest investor fiasco, the failure of BP (BP.L) to close an Arctic drilling deal with state oil company Rosneft (ROSN.MM) in the face of opposition from BP's longstanding local partners.
Rosneft has said the deal, brokered by Sechin himself in his previous role as company chairman, could be revived if a BP rival takes the place of the British major and offers its technology and know-how to develop three prime Arctic blocks.
Around Rosneft's glowing yellow and white stand, decorated with planters shaped like oil drums, international oil executives were queued up.
Inside, Rosneft's chief executive, the diminutive and loquacious Eduard Khudainatov, and his finance chief, a former investment banker, held stand-up meetings with one major after another.
Loitering outside, chatting with a colleague, was the man who bore the brunt of blame for the deal's failure, BP Chief Executive Bob Dudley.