107. Telegram From the Mission to the Organization for Economic Cooperation and Development to the Department of State1

32138. Subject: CIEC: Text of G–8 Paper on Energy Investment Tabled by U.S. in ENC.2

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Proposal for Cooperation in Energy Investment

[Page 376]

1. Participating countries recognize that the establishment and maintenance of a satisfactory global balance of energy supply and demand during and beyond the transition period will require major capital investment in the exploration, development, and utilization of new energy, both conventional and non-conventional. It is recognized that in order to create a climate more conducive to investment under mutually satisfactory conditions, international cooperation on a continuing basis should be intensified.

2. The industrialized countries recognize the need to facilitate investment in the development of energy resources, conventional and non-conventional, in their own territories and in the developing countries commensurate with the urgent need to assure adequate world energy supplies. In this regard, they recognize the need to maintain and improve access to capital markets by the developing countries.

3. The oil exporting countries recognize the need to take account of the world’s requirements for energy, and in particular requirements for oil and gas, during the transition period in formulating their plans for investment in new production capacity and supporting infrastructure.

4. The participating countries recognize that the accelerated development of the indigenous energy resources, conventional and non-conventional, of the energy deficient developing countries is essential to the economic progress of these countries. This development will require major amounts of capital. The industrialized and oil exporting countries, to a greater or lesser extent, are the primary sources of such capital.

5. Participating countries recognize the important role the private sector plays in providing much of the capital, as well as much of the technology and know-how, for the exploration and development of the energy resources of the energy deficient developing countries. It is also recognized that, in order to facilitate the flow of such capital into energy resource development in the EDDCs, unnecessary constraints should be reduced. In this respect, cooperation agreements between investing and host countries could be appropriate in some cases. Foreign investment should be consistent with the needs of the host countries and make an optimum contribution to the fulfillment of their economic development plans.

6. The Energy Commission conducted a preliminary examination of the proposal to establish an International Resources Bank to facilitate investment in raw materials, including energy, in developing countries, with particular attention to its potential to facilitate increased investment in energy development in the energy deficient developing countries. The participating countries welcome the recent decision by the IBRD/IMF Development Committee to study the International Resources Bank proposal and suggest that the Development Committee’s [Page 377] examination of the proposal take account of the urgent need of many developing countries to reduce their dependence on imported energy.

7. It is also recognized that the official international lending institutions have played and will continue to play an important role in the development of indigenous energy resources in the energy deficient developing countries. Participating countries recommend that these institutions, in the context of their overall development lending activities, recognize the urgency of the energy investment requirements, including infrastructure, of such countries.

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  1. Source: National Archives, RG 59, Central Foreign Policy Files, D760404–0665. Unclassified; Priority. Repeated to all OECD capitals, Algiers, Jidda, Buenos Aires, Brasilia, Yaounde, New Delhi, Jakarta, Baghdad, Tehran, Kingston, Mexico City, Lagos, Islamabad, Lima, Cairo, Caracas, Belgrade, Lusaka, Kinshasa, and USUN.
  2. The seventh round of the CIEC commissions was held in Paris October 20–28. Discussion on the first day was devoted to an EC working paper on “Energy Cooperation” that had been introduced on the last day of the September round. The Saudi co-chairman described the paper as an “attempt to establish a mechanism which could be used to deprive producer countries of their ‘sovereign right’ to dispose of their resources as they saw fit.” (Telegram 31366 from USOECD Paris, October 22; ibid., D760397–0268) The October 22 and 23 sessions are summarized in telegram 31467 from USOECD Paris, October 25; the October 25 and 26 sessions in telegram 31793 from USOECD Paris, October 27; and the October 27 and 28 sessions in telegram 32132 from USOECD Paris, October 29. (All ibid., D760399–0139, D760401–0556, D760404–0652)