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India's initiative to have an Asian oil club achieved some degree of success today with major global oil producers agreeing to institutionalise the forum and work on issues of energy security, stability and sustainability.
Oil ministers of 12 countries converged in New Delhi on Thursday for a day-long ministerial round table on regional cooperation in the oil economy.
Besides India and co-host Kuwait, other who attended included Iran, Japan, Malaysia, Oman, Qatar, Saudi Arabia, the United Arab Emirates, China, Indonesia and Korea.
The draft resolution, which will be vetted by the participating countries, committed itself to evolving a price mechanism in Asia wherein prices are sustained at levels where consumers buy more and producers have more to invest.
But there was no immediate consensus on India's proposal to create an Asian price marker or index on the lines of West Texas Index for the North America, Brent for Europe and Dubai Oman.
In his opening statement, Petroleum Minister Mani Shankar Aiyar had proposed a move towards evolving a sophisticated Asian market for oil and petroleum products. The market could work through petroleum exchanges and derivatives.
Oil producers could also invest in refining, LPG terminals, pipelines and petrochemicals plants in consuming countries while consumers may seek investment in upstream oil and gas exploration and production to deepen interdependence and trade in Asia, he said.
On investment, the draft said, "Caution must be exercised in promoting balanced investment so that over-investment does not lead to excess capacity nor under-investment to shortage of supplies."
The countries would work towards guaranteeing security of both demand and supply though crisscrossing investment along the oil and gas products chain.
Oil producers were of the view that the Asian market should be fully developed for a marker to be in place, besides it should be moving towards spot purchases from the long-term agreements which is the current practice.
Domestic oil productions if placed in a spot market could lead to higher prices which would not be in the interest of consumers, they felt.
It also offered to consider the Iranian proposal for an Asian Bank for Energy Development and proposed moving towards the creation of strategic reserves through the Japanese experience which will not be used for a commercial advantage.
The conclave committed to meet again in Saudi Arabia, Japan and Kuwait and carry discussions forward. The future round tables would be alternating between net importing and net exporting countries.
The secretariat of the International Energy Forum is also proposed to be used for preparation of the ministerial round tables.
The attempt at regional cooperation in the sector, however, concluded with a draft resolution which said that the Asian oil economy is "integral to, and inseparable from, the global economy".
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