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UNCLAS RIYADH 000188 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR NEA/ARP 
DEPARTMENT FOR EEB DOUG HENGEL 
DOE FOR PDAS JONATHAN ELKIND 
 
E.O. 12958: N/A 
TAGS: EPET ENRG PREL SA
SUBJECT: INTERNATIONAL ENERGY FORUM DISCUSSIONS CAUTIOUSLY 
ADVANCE AGENDA TOWARDS CANCUN MINISTERIAL 
 
 ¶1. (SBU) Summary: Forty three of 53 countries that attended 
the International Energy Forum's February 6-7 meeting of the 
Expanded High Level Steering Group broadly endorsed a 
recommended set of next steps to make the IEF a more 
effective venue for a producer-consumer dialogue on 
international oil issues.  There was broad consensus that the 
IEF's informal structure offers an important venue for 
producers and consumers to discuss frankly issues related to 
long-term oil supply and demand, which in turn helps build 
understanding of others' concerns.  There was general 
consensus that the IEF would benefit from a charter that 
spelled out clearly what the organization's role is, and how 
it will function.  A number of countries also stressed the 
importance of not duplicating the work of other 
organizations, such as the International Energy Agency or 
OPEC.  Countries will be asked to formally confirm their 
approval of a set of recommendations on the way forward and a 
draft declaration for the upcoming IEF ministerial meeting in 
Cancun.  End Summary. 
 
¶2. (U) On February 6-7, 53 countries attended the first 
meeting of the Expanded High Level Steering Group (EHLSG) of 
the International Energy Forum (IEF) in Riyadh.  The IEF 
provided an overview of the recommendations of the group of 
experts tasked at the December 2008 summit to examine the 
reasons for oil market volatility and recommend ways to deal 
with this issue in the future. 
 
Rationale for a Stronger - but Informal - Organization: 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3. (SBU) The chair of the High Level Steering Group, Saudi 
Assistant Oil Minister Prince Abdulaziz and co-chair Graham 
White, Director of the UK's International Energy Markets 
Department, summarized the history of this group, noting that 
the leaders of the G20 at the December 2008 London Summit 
tasked the IEF to examine the reasons for oil market 
volatility.  White noted that UK Prime Minister Brown 
remained convinced of the importance of understanding how 
physical and financial oil markets interacted, which in turn 
calls for a more transparent, active dialogue between 
producers and consumers.  In that regard, the eleven-country 
HLSG had looked for ways to facilitate an enhanced producer 
consumer dialogue.  It concluded that it would make sense to 
enhance the architecture of the IEF, including strengthening 
the political commitment of participating countries to 
conduct a substantive dialogue, and regularize their 
financial support for the secretariat, while keeping the 
informal character of the organization, which has proven very 
useful in allowing countries to freely debate underlying 
issues, rather than rehash prepared formal positions.  White 
stressed the importance of avoiding duplication of the work 
of other organizations, particularly the International Energy 
Agency (IEA) and OPEC.  White also noted the importance of 
focusing the dialogue on three areas, including the long-term 
outlook for supply and demand for oil, the links between 
physical and financial energy markets, and improving data 
collection within joint efforts such as JODI.  Prince 
Abdulaziz also underscored the importance of a stronger 
producer-consumer dialogue, and working together to limit 
market disruptions, which should help encourage the necessary 
investments to ensure that future demand is met.  He 
concluded by noting the strong attendance at this EHLSG 
meeting embodied the spirit of cooperation that the King had 
hoped to foster when he declared that Saudi Arabia would 
support the founding of the IEF Secretariat in Riyadh. 
 
¶4. (SBU) Noe Van Hulst, the IEF Secretary General, briefly 
discussed the way forward.  If Ministers approve the report's 
suggestions at the March ministerial meeting in Cancun, this 
will lead to the drafting of a charter for the IEF, which 
will spell out in detail how the enhanced organization will 
work.  Van Hulst noted the importance of making the content 
of the IEF discussions more results-oriented, and more 
precise, which he hoped would help markets operate more 
 
efficiently and with greater transparency.  Dick Jones, 
Deputy Executive Director of the IEA, noted the IEA's strong 
commitment to the producer consumer dialogue, and welcomed 
cooperation with the IEF.  He noted that the IEA has agreed 
to hold an annual joint seminar with the IEF on oil markets, 
and looks forward to cooperation on research into the 
physical and fiscal links in the markets. 
 
Delegation Comments: 
- - - - - - - - - - - 
 
¶5. (SBU) Most of the fifty three delegations offered comments 
on the HLSG recommendations. All delegations were broadly 
supportive, at least in their public comments, about the 
general direction of the recommendations and the value of 
strengthening this informal forum for producers and consumers 
to discuss important energy issues.  India was noteworthy for 
its enthusiastic and foursquare support of the expanded IEF 
and the recommendations of the HLSG.  China was also quite 
supportive of the IEF's role in strengthening the 
producer-consumer dialogue, particularly because of its 
informal character.  South Korea noted its support for the 
IEF, which it expects to contribute to the success of the 
next G20 summit in Seoul.  A number of delegations raised 
questions about what the scope of the enhanced dialogue would 
cover.  Several argued in favor of including other forms of 
energy, such as gas and renewable energy, although no clear 
consensus emerged in favor of such an expansion of IEF's 
scope.  The (relatively low-level) Russian delegate called 
for the involvement of the Gas Exporting Countries Forum 
(GECF), although it was not clear whether this was under 
formal instructions.  Countries also asked about the specific 
goals and purpose of the enhanced dialogue, and how 
membership would be decided, both in the organization and on 
the executive board.  Several (e.g., Canada) also noted they 
would need more detail on the budget implications of 
expanding the scope of the dialogue and its membership before 
being able to approve the recommendations. Several non-G20 
countries suggested that Annex II (the IEF-IEA-OPEC agreed 
work plan) of the recommendations should refer to the 
importance of working with the G20 "and other relevant 
organizations."  The co-chairs undertook to convey that 
suggestion to OPEC and IEA (both of whom had representatives 
in attendance), although they also noted that the document 
was a work plan that reflected discussions between the three 
organizations. 
 
¶6. (SBU) The cochairs and the IEF Secretariat took these 
questions on board, and noted that most will be answered 
during the process of negotiating the charter, which will 
spell out in detail what the IEF's goals are for an enhanced 
dialogue, as well as what will be expected from participants. 
 Van Hulst said the secretariat will have to come up with 
some estimates for what the budget would cost, although he 
noted that the first time any changes would take place would 
be the 2012 budget.  The charter will also spell out what 
areas the dialogue will cover, although it was noted that the 
impetus for the current HLSG came from a concern to better 
understand oil price volatility. 
 
Next Steps: 
- - - - - - 
 
¶7. (SBU) Forty three of the 53 countries in attendance 
indicated they were already in a position to approve the 
draft ministerial declaration and the recommendations, or 
expected soon to be able to do so.  Several of the other 
countries (e.g., Canada, Czech Republic and China) noted that 
they had not had sufficient time to review the documents and 
get approval from capitals.  Attendees agreed that they will 
contact the IEF Secretariat by February 26 to advise whether 
they have formally approved the documents.  In the event that 
countries decide they need further clarification or to 
request changes, the cochairs will try to resolve these 
issues directly.  The cochairs expressed the hope that the 43 
 
countries that indicated they were able, or optimistic they 
soon would be able to approve, would approve with few if any 
changes, reflecting the broad consensus expressed at the 
meeting.  In the event that major changes are proposed, the 
cochairs will call for a meeting on March 16 in Vienna to 
resolve the issues so that the documents can be approved by 
Energy Ministers at the upcoming Cancun Ministerial. 
 
IEA Concerns: 
- - - - - - - 
 
¶8. (SBU) In an IEA members' meeting before the plenary, Dick 
Jones noted that IEA is interested in greater cooperation 
with OPEC and the IEF, although he complained that OPEC  had 
not recently seemed to be interested in expanding cooperation 
with the IEA, and the IEA has felt left out of some of the 
IEF discussions.  There was some discussion about whether it 
made sense to expand the IEF into gas and renewable energy, 
although several IEA members noted that it may make more 
sense to focus the IEF's efforts, and that there would be 
budget implications of broadening its scope too much. 
 
¶9. (SBU) In private comments made to USDEL, most countries 
thought that the IEF could play a useful role in 
strengthening the producer-consumer dialogue, but several 
thought that it would be more effective to the degree it was 
more tightly focused and avoided duplicating the work of 
other agencies, such as the IEA.  Some also expressed 
frustration that they had received the documents with only a 
few days to review them, and then received a full court press 
from Prince Abdulaziz to agree to the suggestions in the 
HLSG. 
 
Comment: 
- - - - 
 
¶10. (SBU) Comment: The general consensus of participating 
countries is that the IEF could be a good vehicle to 
strengthen the producer-consumer dialogue is very welcome. 
This could both help address some of the underlying concerns 
that led to the formation of the HLSG two years ago, such as 
an interest in understanding better the concerns of producers 
and consumers and how they play out in the linkages between 
the physical and financial aspects of energy markets.  It 
also offers the prospect of a greater Saudi role in an 
international group, which Embassy Riyadh believes will 
provide a useful precedent in a number of areas.  We will 
continue to work with the SAG to productively channel their 
enthusiasm for this organization. 
 
¶11. (U) Countries indicating approval or optimistic they 
would soon approve: Algeria, Angola, Austria, Australia, 
Azerbaijan, Bahrain, Belgium, Czech Republic, Ecuador, Egypt, 
India, Iran, Iraq, Ireland, Italy, Japan, Kuwait, Hungary, 
Finland, France, Germany, Greece, Libya, Netherlands, New 
Zealand, Nigeria, Norway, Mexico, Oman, Pakistan, 
Philippines, Poland, Qatar, Romania, Saudi Arabia, South 
Africa, Spain, Sudan, Turkey, United Kingdom, UAE, United 
States, Venezuela. 
 
¶12. (U) This cable has been cleared by the U.S. delegation 
(DOE PDAS Jonathan Elkind and EEB DAS Doug Hengel). 
 
SMITH