June 22 (Bloomberg) -- Prime Minister Gordon Brown today said he will open Britain's energy industry to investment from oil producing nations as a way of keeping a lid on crude prices and paying for measures to clean up the environment.

The U.K. is talking to the Abu Dhabi Investment Authority about new investments and with the government of Qatar about a joint energy fund, Brown said in Jeddah. Saudi Arabia agreed today to work on carbon capture and storage facilities valued at 1 billion pounds ($2 billion), and the U.K. government is poised to approve an 800 million-pound offshore wind farm that Norway's state-owned StatoilHydro ASA plans to build, Brown said.

The initiatives are part of a ``new deal'' Brown proposed to oil producing nations on behalf of the 27-nation European Union. He wants nations that have reaped more than $3 trillion from a surge in oil prices to recycle those funds into Western nations in exchange for stronger trade links.

``Britain and other oil consumers should open our markets to new investment from oil producers,'' Brown said today in a speech in the Saudi Arabian port city of Jeddah. ``In this way we can move from the old conflict of interest between producers and consumers.''

Shift in Tone

The remarks are an attempt to set a new tone for western relations with oil producers that still are colored by memories of the oil shocks of the 1970s.

Two years ago, when Russia's OAO Gazprom was considering taking a stake in the Centrica Plc pipeline company, the U.K. government bristled, saying any bid would face rigorous tests about how it affects the nation's energy security. At a press conference, Brown said investors would still have to ensure ``the security issues and all the safety issues are met.''

In London, Britain's Conservative opposition dismissed Brown's remarks as ``grandstanding.''

``High fuel bills are causing massive pain and have only been made worse by Labour's economic failure,'' Alan Duncan, a Conservative member of Parliament, said in a statement.

Brown also meets Saudi King Abdullah today and offered to host a follow-up meeting with producing and consuming nations in London later this year. He met with Saudi Crown Prince Saud, the defense minister, to discuss regional issues, and China's delegation.

Protests in the West

Higher prices have touched off protests by motorists in Britain, France and Spain. Brown, the most senior Western leader attending the meeting with oil producing nations in Jeddah today, set out a more cooperative tone with nations in the region, talking about ``common interest'' in the ``stability'' of the energy markets.

``What we've got is an agreement here, possibly for the first time, that oil prices are too high,'' Brown said at a press conference in Jeddah. ``This is the biggest problem we have in the world at the moment. The producers themselves say the high price of oil is detrimental.''

Western leaders are at odds with producing nations about the cause of a surge in the price of crude. While Brown and the International Energy Agency say the world needs more supply, producers blame speculators, a drop in the value of the dollar and wars in Iraq and Afghanistan for spooking the market.

OPEC Divisions

The Organization of Petroleum Exporting Countries itself is split about what to do. Saudi Arabia, supported by Kuwait, plans to pump more to blunt a price it says is too high. Iran, Venezuela and Libya have said there's sufficient supply in oil markets and the causes of rising prices are elsewhere.

``America is responsible,'' Libyan leader Colonel Muammar al-Qaddafi said in a speech in Tripoli on June 12. ``The wars in Iraq and Afghanistan, and the threats, that's what's pushing oil prices up.''

Brown also told the producers that the U.K. is determined to wean itself off its oil dependence, expanding its nuclear power industry and developing wind and other renewable forms of energy. Britain aims to get 20 percent of its energy from renewable sources by 2020, five times the current level.

The government is pushing to increase the portion of electricity generated by nuclear power plants, which now provide about a fifth of supply. Brown has wooed companies to build new plants and lowered immigration restrictions for atomic engineers. The House of Commons on June 25 plans to approve legislation streamlining the planning process for new plants.

Nuclear Ambition

``Our commitment to the biggest expansion of nuclear power in Europe is now clear and definitive,'' Brown said in his speech. ``Fifteen of 27 European countries are now engaged in nuclear power.''

Brown also is working to limit demand by raising levies on gas-guzzling cars and keeping in place the biggest tax burden on gasoline consumption in the Group of Seven nations. Government ministers themselves increasingly travel in Toyota Prius sedans powered both by gasoline and electricity.

He also sought to assure oil producers that the west wasn't attempting to cut them out of revenue streams from new forms of energy. Brown said Saudi Arabia and Norway are working with Britain on carbon capture programs, which pump fumes blamed for damaging the Earth's climate for storage underground.

The United Arab Emirates, whose Abu Dhabi Investment Authority is the biggest sovereign wealth fund in the Persian Gulf region, is talking to the U.K. about investing in nuclear projects, Brown said. He wasn't more specific.

Qatar also is seeking to invest in Britain's energy industry, and Brown said he talked about StatoilHydro's Scira wind farm project offshore Britain with Norwegian Prime Minister Jens Stoltenberg.

``All of this we can do,'' Brown said. ``It will only create the stability we need in the oil markets if other oil consuming countries also open up their markets and if oil producers are willing to recycle their revenues not just into Britain but into other oil consuming countries.''

To contact the reporter on this story: Reed Landberg in Jeddah, Saudi Arabia, at landberg@bloomberg.net.

Last Updated: June 22, 2008 07:38 EDT