Saturday, October 25, 2008

Brown takes back invitations to UK summit

The Financial Times

By Alex Barker

October 24 2008 22:39

Gordon Brown, the British prime minister, is downgrading plans for an international oil summit and withdrawing invitations to George W. Bush, Hugo Ch├ívez of Venezuela and Muammer Gaddafi of Libya after a collapse in oil prices sapped the interest of world leaders.

The move to “recalibrate” the summit to ministerial level comes after British ambassadors spent months selling the importance of the December conference, which Mr Brown called to address “the most worrying situation in the world”.

Downing Street said the plans had been overtaken by the US offer to host heads of state from the G20 countries for a summit to discuss the global financial crisis next month, even though this gathering will exclude some big oil producers. “The priority for the heads of government must be to address global economic instability at the G20, including oil prices,” said one official.

This summer Mr Brown had urged the leaders of the world’s biggest oil producers and consumers to put aside political differences and gather in London to find “global solutions” to the energy crisis.

But since June – when the prime minister said “the demand for oil is exceeding the supply of oil, not just now but in the medium to long-term future” – the price of a barrel of oil has halved. It is now expected that Ed Miliband, Britain’s energy secretary, will host min­isters at a December summit.

Opec responded to the slump in prices by cutting its production quota on Friday, a step that Mr Brown dismissed as “absolutely ridiculous” earlier this month. Oil prices, however, continued to fall after the output cut.

Summit invitations were sent earlier this year to the leaders of the US, Russia, Venezuela, Saudi Arabia, China and Libya, among others. Mahmoud Ahmadi-Nejad, the president of Iran, was “blackballed” by British officials but his energy minister was offered a platform at the conference.

Meanwhile Mr Gaddafi, the Libyan leader, was asked to make his first official visit to London after decades of isolation. “Just imagine the political handwringing as they decided the guest list,” said one British diplomat.

Officials feared that the sharp turn in the oil market threatened to distract from discussion of long-term energy issues. Some said the conference would become a platform for political grandstanding and calls for oil production cuts.

UK diplomats complained of the complexity of organising an event that struggled to pique the interest of several world leaders. Protocol officials were particularly concerned about playing host to Mr Gaddafi, who travels with a bevy of female bodyguards and prefers to stay in a Bedouin tent.

Although inquiries were made to find a site for Mr Gaddafi to pitch his tent, it was expected he would be in London for just a day.

Mr Brown wants the ministerial summit to work on ways to diversify energy supplies and make the oil market more transparent – issues that were raised at an oil conference he attended in Jeddah in June.

One priority for Mr Brown is persuading oil-producing na­tions to open up their energy resources to foreign in­vest­ment in exchange for oil-consuming nations opening up their energy markets to investment, including renewables.

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