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U.S. energy official praises Russia's oil increase

MOSCOW The U.S. energy secretary, Spencer Abraham, praised on Friday Russia's plans to increase oil exports to America and highlighted natural gas as the next long-term U.S.- Russia joint energy project.

"Russian President Vladimir Putin's address on Wednesday, in which he called for an increase in Russia's oil export capacity and approval of new routes, I believe, is very positive news for energy markets," Abraham said.

Russia, the world's second-largest oil exporter, produced 9.01 million barrels of oil per day in April, a post-Soviet record high. But the country's pipeline export capacity recently hit a ceiling of 4 million barrels per day.

The United States wants Russian oil to reach the market quickly, possibly by building a pipeline in the northern part of the country to speed shipments across the Atlantic.

"We want to see Russian oil and gas more available to the U.S. market," Abraham said, adding that a northern Russian port could be used to move oil through the Baltic Pipeline System. "I'm meeting with Transneft, Gazprom and Lukoil to continue important discussions along these lines," he said. Lukoil and Gazprom are Russia's top oil and gas producers, respectively.

The Russian government keeps tight control over oil exports, allowing only Transneft, the state-owned pipeline monopoly, to handle shipments.

Abraham said discussions with Russian authorities, including Prime Minister Mikhail Fradkov, did not set dates for increased energy exports to the United States. "It's too early to say when it will happen," he said, adding that the projects would demand "substantial investment."

But the flagging U.S.-Russia energy dialogue needs to be revived, he said, adding that the two sides have to move beyond discussions to a more "action-oriented" focus.

In his State of the Nation address this past week, Putin called for an increase in Russia's oil export capacity and called it "very positive news for the energy market."

To accelerate an increase in Russian oil exports, Abraham said, the U.S. government will encourage American companies to take part in Russian energy projects. But he declined to specify whether U.S. companies or the U.S. government would finance Russian pipelines or what the outcome might be for ExxonMobil's disputed concession in Russia's Far East.

Abraham said he did not have meetings planned with Yukos, the country's embattled oil giant. Yukos produced 19 percent of the total oil extracted in Russia in 2003, according to figures published by Bloomberg News. But analysts have warned that the Russian government's $3.4 billion tax claim and the prosecution of its former chairman, Mikhail Khodorkovsky, could affect Yukos's future.

"We have to wait and see what happens," Abraham said, adding that he did not feel Yukos's situation would limit a future increase in exports. "Our goal is to diversify our access to energy exports, and we'd like to see United States access to larger amounts of Russian exports, irrespective of who the companies are," he said.

Abraham also said that record oil prices were being eased by promises of increased production from Saudi Arabia, Kuwait, the United Arab Emirates and Nigeria.

Additionally, he said, "The United States' demand for natural gas is rapidly increasing. Over the next 20 years our demand for gas will far outpace our domestic supply and production capabilities. Russia has great potential to be a trade partner with regards to liquefied natural gas."

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