Russia: EU should adapt its legislation to the South Stream bilaterals

  

The European Commission should adapt its internal legislation to the bilateral agreements Russia signed with six EU countries for building the South Stream pipeline, and not the other way around, Russian Ambassador to the EU Vladimir Chizhov said on Monday (13 January).

Speaking at a public event in Brussels, Chizhov said that his country would not negotiate with the Commission for the annulment or termination of the validity of intergovernmental agreements for the South Stream gas pipeline, signed with six EU member states and Serbia.

Last December, the Commission announced that the bilateral agreements for the construction of the Gazprom-favoured South Stream pipeline – concluded between Russia and other European countries - were in breach of EU law and needed to be renegotiated from scratch.

Gazprom and Russian officials clearly said Moscow had no intention of halting the construction of the pipeline. Russia considers the inter-governmental agreements valid under international law, which in its view has supremacy over EU law.

The six EU countries have signed inter-governmental agreements with Russia over South Stream - Austria, Bulgaria, Croatia, Greece, Hungary and Slovenia. Serbia, which is not a member state but is part of the EU-backed Energy Community, has agreed that the Commission should be their ‘advocate’ for adapting the bilateral deals to EU law.

According to Chizhov, if the six EU signatories have authorised the EU executive to negotiate on their behalf, then the talks should focus on the opportunities to adapt the EU’s Third Energy Package to the already signed agreements, rather than the opposite. The Third Energy Package aims to prevent firms that already dominate supply from also controlling distribution networks.

"I have full respect for those six EU member states that signed intergovernmental agreements with Russia, but they were aware of the possible complications. If they really assign negotiating powers to the European Commission, we will talk to the Commission, not about the agreements but on the possibility of adapting the third Energy Package to those agreements," the Ambassador said.

Chizhov said the Third Energy Package was "not the best invention of the EU" and added that most energy projects in the EU were based on derogations from this legislative package. Chizhov also questioned the scope of the rules, as they affected countries which were not an EU member state, like Serbia.

Russia's tactics have been likened to “divide-and-rule”, and appear to be working. If the six EU signatories to the South Stream bilaterals do not fulfill their obligations towards Russia, Moscow is expected to take the issue to the international court, where it will likely win, analysts say.

But if these six countries choose to proceed with the construction of the pipeline in the absence of a legal solution with the Commission, they are likely to face heavy infringement procedures and trials with the European courts.

Timeline: 
  • 17 Jan.: Meeting between Russian energy minister Alexander Novak and EU’s Energy Commissioner Günther Oettinger
  • 28 Jan.: EU-Russia summit.
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Comments

a Dutchman's picture

headshaking about the geopolitics of the European Commission's rest here only. Taking many other pan-European issues into account, indeed 1914 and 2014 have something in common.

Anna's picture

Information about the state of Iraq's oil sector .
Arayik Sargsyan, Academician, President of the Geopolitical Academy, Honorary Consul of Macedonia to Armenia.

Jordanian Minister of Energy A.Ensour (Ensour) at a meeting in Amman, January 9, 2014 with his colleague Abdurrahman Al - Luaybi (Luaibi) said that Jordan attaches great importance to accelerate the implementation of the project of construction of the main pipeline (ISPs ) for export Iraqi oil through Jordan .
The parties discussed the stages of work performed and the discussion focused on the research and tenders, which must be held within the next few months .
A.Ensour noted the possibility of private sector participation in the project , highlighting the possibility of extending the ISPs to Egypt and the Mediterranean Sea.
Abdurrahman Al - Luaybi said the project would be economically beneficial for Iraq and Jordan , pointing to the possibility of establishing an oil refinery ( refinery) and thermal power plant (TPP) in the city of Aqaba, 330 kilometers south of the capital of Jordan.
Iraq and Jordan have agreed to build a new MNP during the visit of Prime Minister Nuri al- Maliki in Jordan in December 2012
February 28, 2013 at a conference in Amman, Mr. Governor of Basra H. Khalaf said that Iraq began the practical work on the design of MNEs from Mr. Basra in southern Iraq - to the Jordanian port of Aqaba on the Red Sea .
Construction MNEs Iraq - Jordan is divided into two stages.
1st stage - construction of MNP Basra - Aqaba length of 1680 km .
Power MNP Basra - Aqaba make 1 million barrels / day .
In the oil fields of Basra produces about 2.3 million barrels / day of oil, or about 70 % share of total oil production in Iraq.
On the 2nd stage of Iraq is interested to build MNP Basra - Banias , capacity 1.25 million barrels / day in the Syrian port of Banias on the Mediterranean , previously reported D. Hassan , head of the state-owned design SCOP, shareholder is the Ministry of Oil of Iraq.
The project involves the provision Ioradanii up to 150 thousand barrels / day of oil , and the rest of the oil to be exported through the port of Aqaba.
BNP value of 18 billion U.S. dollars , 2.25 million transportation capacity bar / day of oil, officials estimated , will generate 2 - 3 billion U.S. dollars / year of revenue for Jordan.
In November 2013, it became known that the right to participate in the tender received by companies from Italy , Egypt and Korea.
Recall that back in 2002 the position of Russian companies in Iraq were stronger.
Tender for construction of MNEs from the field al-Haditha in north- western Iraq to the Jordanian city Zargami worth 350 million U.S. dollars then won Stroytransgas, while not yet controlled G.Timchenko which acquired a stake in the company only in 2007
And at this time , " Gazprom Neft " has already received the first oil field in Iraq Badr .

" At the end of December 2013 ," Gazprom Neft " has successfully completed well testing DB 4 on the Iraqi Badra , operator at which the company . Resulting daily rate was seven thousand barrels of oil gushing mode ."
Badr on completing the construction of the infrastructure necessary for the field is in commercial operation in 2014. Efforts to rebuild the central collection point (DSP ) of oil with a total capacity of 170 thousand barrels per day - soon to be launched into operation the first line of the DSP capacity of 60 thousand barrels per day .
Also is preparing for the construction of a gas processing point capacity of 1.5 billion cubic meters per year . Terminates the connection to the main field pipeline system in Iraq.
Badra is located in the province of East Vassit on Iraq. According to preliminary estimates geological reserves Badrah consists of three billion barrels of oil . Contract with the Iraqi government to develop the field was signed in January 2010 with a consortium of companies , which includes the " Gazprom Neft " (30 percent) , Korean Kogas (22,5 percent ), Malaysia's Petronas ( 15 percent) and Turkish TPAO (7.5 percent). Another 25 percent of the project belongs to the Iraqi government . " Gazprom oil " is the project operator .
Badra development project is designed for 20 years with a possible extension for five years. Estimated volume of investments of the order of two billion dollars. Investors will be reimbursed the costs and paid a fee of $ 5.5 per barrel of oil equivalent produced . In 2017, the production volume is expected to reach 170,000 barrels per day (about 8.5 million tons per year) .
A supply of oil from Iraqi Kurdistan to the world markets via Turkey to begin by the end of this month.

As stated in the government of the Kurdish autonomy , the first batch of "black gold " of about 2 million barrels will be placed on the newly opened pipeline to the Mediterranean terminal in the Turkish city of Ceyhan for export . Authorities estimate of Iraqi Kurdistan , by March of this year the monthly volume of oil exports from the autonomy increase to 6 million barrels by the end of the year it will be about 12 million barrels.
In November last year, Turkish Prime Minister Recep Tayyip Erdogan and the head of government of Iraqi Kurdistan Nechrivan Barzani signed an agreement under which Kurdish autonomy is able to deliver oil and gas to the world markets via Turkey .
Oil supplies are the subject of bitter dispute between Iraq's central government and the autonomous Iraqi Kurdistan . According to the official Baghdad , only he has the right to control the export of "black gold " and signing contracts , but the Kurds believe that oil supplies they have the right to act independently , without contradicting with the Iraqi constitution .
However , doing business in Iraq may prevent geopolitical games of the Royal House of Saud and Israel. Israeli officials have admitted trying to dismember Iraq and paralyze the activity of Baghdad in the Arab world and the region.
The former head of Israel's General Security Service ( Shin Bet ) Avi Dichter in his speech at the Center for Strategic Studies said that " Israel's strategic objective is not to give Iraq to play an active role at the regional level and in the Arab world that can threaten the security of Israel . "
Newspaper The Jerusalem Post citing Dichter writes that Israel supports the Iraqi Kurds to form an independent Kurdish state . Tel Aviv pursues this goal since the 1970s ...

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