Dear Colleagues,

It is a pleasure to be part of an OSCE meeting with such a timely and challenging agenda.

Allow me at first to lay the background for your discussions with some insights into the Energy Charter Treaty and the Modernisation of the Energy Charter Process.

The Energy Charter Treaty is intended to provide basic grounds for stable and predictable energy cooperation. The ECT stands on four pillars:

• investment;
• trade;
• transit;
• dispute resolution.

Also, an essential part of the Energy Charter Process includes the provisions of the Protocol on Energy Efficiency and Related Environmental Aspects.

The ECT aims to establish a level playing field for energy trade, transit and investment on an international level.

In view of the new developments in the world of energy and following the proposals of the President of the Russian Federation, at the end of 2009 the ECT members initiated the modernisation of the Energy Charter Process.

Last year, the Energy Charter Conference has officially adopted the Road Map for the Modernisation of the Energy Charter Process. The main areas of the Road Map are the following:

Promotion of the Energy Charter and the Energy Charter Treaty; targeted expansion and consolidation of its geographic scope;

Transit/cross-border trade; finalisation of the Energy Charter Protocol on Transit, the main objectives of which are to ensure secure, efficient, uninterrupted and unimpeded transit, to promote more efficient use of the transit infrastructure, to facilitate the construction or modification of the transit infrastructure;

Emergency response, which is aimed at the resolution of controversies in cases of emergency and at securing the established flows of energy; enhanced state-to-state arbitration; clarification of the conduct of conciliation of transit disputes;

Investment promotion and protection; complementing the effectiveness of the relevant ECT provisions in view of major trends affecting investments into the energy sector; promotion of a healthy investment climate (development of a Model Investment Agreement); assessment of the ECT provisions with regard to low-carbon investment;

Energy efficiency; cooperation with other organisations working on matters related to the work of PEEREA needs to be developed in a win-win context looking to maximise the effects of current activities within each organisation;

Policy forum, interdependence, energy security; a contribution to a strengthened partnership between all stakeholders to enhance global energy security and to deal with growing interdependence; policy dialogue within the Energy Charter Process shall be open-ended and be used actively to promote common objectives within a broad cooperative framework and to coordinate energy policies as appropriate; the participation of the Strategy Group in the process of consultations over possible enhanced legal frameworks for energy cooperation;

Management, finance and legal affairs.

This is the context of the discussions, which were triggered to a large extent by the Russian proposals.

In general, the ECT member states welcomed the fact that Russia demonstrated its interest in strong legal frameworks for trade, investment and cooperation in the field of energy. The ECT countries supported the objective to increase energy security and energy relations through a legally binding framework on a multilateral level. The proposed draft Convention on Ensuring International Energy Security covered several important objectives and principles that the ECT members subscribed to, such as the objective to improve energy security, develop open and competitive energy markets, to protect the environment, the importance of investment promotion and protection, the call for diversification, and for transparency and predictability of energy policies, strategies and legislation. The objective to enhance efficiency in the energy sector and to encourage scientific and technological cooperation was also shared.

At the meeting of the Strategy Group on 1 March 2011, some participants specifically pointed to the elements of the Russian proposal, which could be discussed as part of the Road Map for Modernisation. For instance - actions in emergency situations, the exchange of information on significant changes to energy policies that could affect the interests of other Parties, the prevention and rectification of the consequences of major accidents during offshore exploration, extraction and transportation of oil, promotion of safe and secure transit, including emergency situation prevention and a response mechanism. It was also underlined that international legal frameworks needed to be mutually applicable and a good balance of interests and commitments should be kept between producing and consuming countries.

It was noted that most of the issues included in the Russian proposal were already covered by the Energy Charter Treaty, which had also been confirmed by the comparative analysis prepared by the Secretariat. The discussion and further consideration of the Draft Convention in the context of the Charter's modernisation process was welcomed.

From substantial and organisational points of view, the Energy Charter Secretariat is fully equipped - political will provided - to efficiently facilitate these discussions. The ECT platform is best suited to discuss legally binding matters. The Strategy Group was specifically established to organise these result-oriented discussions.

The Russian preference for having a global legal framework for energy cooperation was also taken into account and is being analysed within the context of the Energy Charter Treaty's expansion and consolidation policy. It would be appropriate to mention here that in addition to the contracting parties, the Energy Charter constituency includes a number of observers and, for instance, China and the United States are among them.

A lot of deserved prominence was given lately to the statement of the President of the Russian Federation at the latest Russia-EU Summit in December 2010, that Russia is ready to work on the basis of Energy Charter. We in the Secretariat highly appreciate Russia's active participation in the modernisation process. We can and should find a mutually acceptable compromise. This work should be done. The win-win solution is the only option in the area of energy security.

Thank you for your attention.