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Gas exporters want to control the markets but reality complicates them

The gas exporting countries want to control the market in the style of what OPEC does with crude, to show authority and achieve better prices, but the complex reality of the sector exceeds the possibilities of their performances.

Santa Cruz (Bolivia), Nov 25 (EFE) .- The gas exporting countries want to control the market in the style of what OPEC does with crude, to show authority and achieve better prices, but the complex reality of the sector goes beyond the possibilities of its actions.

The objective of fighting against the "manipulation" of prices, the claim of "fair prices" and the coordination to defend the value of gas as a key clean energy for sustainable development were spelled out at the summit held in Bolivia on Friday.

It was about the IV summit of the Forum of Gas Exporting Countries (FPEG) and the first held in Latin America, for which several leaders were expected and finally only attended the one of Venezuela, Nicolás Maduro, and from Equatorial Guinea, Teodoro Obiang, to accompany the Bolivian host, Evo Morales.

At the inauguration of the forum, mostly attended by ministers, Morales warned that sector actors must "have the ability to work together to fight against those who want to appropriate" natural resources "through manipulation abusive of the price. "

Likewise, he considered that such distortions are" a destabilization tool "for states and governments.

For his part, Maduro said that only the Dialogue and the integration of these countries is the way to achieve in effect the defense of the natural wealth they possess.

The FPEG, which has existed since 2001 and in the last eight years has four biannual summits have been held to increase their importance, it has been proposed several times to move towards the aforementioned goals, but they remain challenges in their pronouncements.

In the Declaration of Santa Cruz, the city where the three leaders and 17 high authorities met, the governments once again stressed the need to strengthen the body that unites them.

"Strengthen the forum of gas exporting countries as a platform to plan and coordinate the positioning and advance, both (in) the image and (in) the cause of the forum, in the global energy context ", says one of the points of the aforementioned statement.

The need for strengthening is striking in view of the arrival of only two leaders for the forum in Santa Cruz, which contrasted with the previous announcement by the Government of Bolivia that at least ten leaders would attend the meeting, since the same event held in Iran in 2015 was nine heads of state.

In the declaration, the countries also intend to seek a "fair price" for gas by proposing an equitable risk distribution approach in relation to the cost of crude oil and announce policies to boost long-term contracts.

However, the objectives and guidelines designed to affect international markets collide against the reality of the gas sector, according to analysts consulted by Efe.

The Bolivian ex-minister of Hydrocarbons and today analyst Mauricio Medinaceli said that it is difficult to influence the gas prices for two reasons: first, because not all gas producers are members of the FPEG and secondly because, unlike crude, the markets for the product are focused on regions.

In addition, the gas markets are subject to bilateral negotiations and consensus, to indexation to the price of crude oil, to medium- or long-term contracts and to "spot markets". with prices according to the time of the sale and not the market, so the variety of options would complicate the execution of mandates.

On the other hand, to raise a "fair price", added Medinaceli, faces the reality that producers and claimants have a different perspective on what that means, so it is difficult to think of an average price that leaves satisfied both.

Gas is not a product that can be stored for long periods, which complicates its commercialization as in the case of any other raw material, according to the experts.

Fluctuations in the price of oil in effect complicate gas producers by price indexation, but also the irruption of shale gas and trade. of the LNG or liquefied natural gas, which confronts the production of one region against another.

The "gas-to-gas" competition is in vogue and will be classic in the future, the forum warned. President of Repsol, Antonio Brufau.

In this way, several changes are under way for the reality of the trade of the so-called fuel of the 21st century, which put the FPEG before the challenge of specify their objectives when the presidents of the group meet again in 2019 in Equatorial Guinea.

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