EU-Russia Energy Dialogue
Launched in October 2000, this bilateral energy dialogue is aimed at securing Europe's access to Russia's huge oil and gas reserves (the country holds one third of world gas reserves). The dialogue is based on the assumption that interdependence between the two regions will grow - the EU for reasons of security of supply, Russia to secure foreign investment and facilitate its own access to EU and world markets (the EU is responsible for over half of Russia's trade turnover). One key aspect in the negotiation is whether the EU will support Russia's bid for accession to the World Trade Organisation (WTO). Issues addressed in the framework of the dialogue include:
- Opening Russia's domestic energy market to competition (according to the Centre for European Studies (CEPS) Gazprom controls around 70% of Russian gas production and enjoys a monopoly situation in terms of exports);
- improving the business environment, including investments;
- cooperation on climate change under the Kyoto Protocol;
- nuclear safety and decommissioning (avoiding another Chernobyl)
However, a breakthrough on the Energy Dialogue is still pending, and an 18 May EU-Russia summit failed to produce any progress. EU-Russia energy relations remain highly dependent on broader EU-Russia negotiations on the "four spaces" - economic, legal, security, research - on which progress is slow (EURACTIV 11/05/05). Meanwhile, bilateral deals between Russia and separate EU states continue to prevail over a specific EU approach, and disputes between Russia and some of the EU's new Eastern European member states, particularly Poland, have handicapped relations between the two sides (EURACTIV 14/05/07).
EU-OPEC Energy Dialogue
The EU currently imports around 40% of its oil from the Organisation of Petroleum Exporting Countries (OPEC). Concerned about growing global competition for access to scarce oil resources, the EU held its first bilateral meeting with OPEC on 9 June 2005 (EURACTIV 10/06/05). Issues addressed in the dialogue include oil prices, greater data transparency on stocks and investment needs, especially for refineries in consuming countries. The OPEC delegation promised the EU sufficient oil supplies and prices ranging between 35 and 55 dollars a barrel.
Three further EU-OPEC meetings have been held since 2005, the most recent on 30 May in Brussels.
Caspian and Black Sea region
The Baku-Tbilissi-Ceyhan (BTC) oil pipeline was opened on 25 May 2005, connecting the Azerbaijan capital on the Caspian Sea to Turkey's east Mediterranean coast (EURACTIV 27/05/05). The pipeline was mainly built to relieve the West's oil dependency on the unstable Middle East and OPEC producers.
The pipeline has the potential to turn some of the poor countries of the region (Azerbaijan, Georgia, Kazakhstan and - to a lesser extent - Turkey) into wealthy energy states and change the political balance of power in the region. Russia, which has been bypassed, is one of the biggest losers of the project, both economically and politically. Bilateral trade relations - including the 1995 customs union - as well as the EU's possible enlargement to Turkey form part of the wider geopolitical context of the BTC pipeline.
A further important pipeline project is the Nabucco, which will span 3400 kilometers and which will bring 31 billion cubic tons of natural gas per year from the eastern end of Turkey across Romania, Bulgaria and Hungary into Austria. Nabucco is geo-politically significant because it will bypass Russia, much like the BTC. The project, scheduled to be completed by 2013, has encountered financing problems and lack of political will in some member states. But these may have been resolved following an expression of interest in co-financing by Germany's RWE and Gaz de France (EURACTIV 17/09/07).
On 4 December 2006, the Commission and Kazakhstan signed a Memorandum of Understanding that lays the foundation for deeper energy co-operation (EURACTIV 5/12/06).
On 11 April 2007 the Commission published a Communication on co-operation with the Black Sea region, which could serve as the foundation for a future gas pipeline running from the Ukraine, Georgia and Azerbaijan to the EU, and on 25 April construction of a new pipeline began between the Turkish Black Sea port of Samsun and the Mediterranean port of Ceyhan.
The Caspian and Black Sea pipeline sectors remains active, with further oil and gas pipeline deals agreed in May and June 2007 (EURACTIV 24/05/07 and 25/06/07).
Middle East and Persian Gulf countries
The EU has the ambition to become a significant actor in the Middle East peace process and a stabilising agent for the region as a whole. Aside from its dialogue with OPEC, the Commission has put bilateral cooperation agreements in place with the six Gulf States represented in the Gulf Cooperation Council (GCC). A free trade agreement with GCC States was put back on the negotiation table in 2001 after it was abandoned in the early nineties. GCC states hold 45% of the world's oil reserves. All GCC states are part of OPEC except Bahrain and Oman.
Southern Mediterranean (including Turkey, Middle East and North Africa)
Launched in 1995 in Barcelona by foreign affairs ministers, the Euro-Mediterranean Partnership draws together the EU-25 and ten countries in the south Mediterranean (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia and Turkey). Libya has had observer status since 1999. The objective is to gradually set up a Euro-Mediterranean free-trade area by 2010.
Maintaining access to Algeria's gas reserves is of primary importance to the EU if it wants to keep its dependency on energy imports from Russia to a minimum. The Algerian economy is largely dependent on hydrocarbons (oil and gas), which make up 97% of exports, contribute 30% of GDP, and fund 65% of the state budget. The EU takes 62.7% of Algeria's exports and supplies 58% of its imports. On a visit to Algeria on 26 November 2006, Energy Commissioner Andris Piebalgs outlined plans for an EU-Algeria strategic energy partnership based on regulatory convergence of Algerian and EU energy policies; the development of energy infrastructures of common interest and technology co-operation.
In July 2007, the Commission won an end to territorial restrictions and profit-sharing agreements that previously prevented Southern European companies reselling Algerian gas into other EU markets. At the same time, the Commission gave its support to a new pipeline project that is to bring Nigerian gas into the EU through Algeria, starting in 2015 (EURACTIV 11/07/07).
South-East European Energy Community
The treaty establishing the Energy Community of South East Europe (ECSEE) is to be signed in the summer of 2005 with ratification to follow soon after. The ECSEE is a legally binding treaty covering the electricity and natural gas sectors. It is aimed at putting the signatory countries in line with EU energy legislation in order to establish an integrated market. Its members include Austria, Greece, Hungary, Italy and Slovenia on the EU side, and Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Romania, Serbia & Montenegro, Turkey and Kosovo on the other side. The treaty is designed to satisfy the political and economic goal of stabilisation and development of SE Europe.
Baltic Sea Region Energy Cooperation (BASREC)
BASREC was launched in 1999 by Denmark, Estonia, Finland, Germany, Iceland, Latvia, Lithuania, Norway, Poland, Russia, Sweden and the European Commission. Issues discussed include security of energy supply in the context of growing dependency from Russia, gas transit routes in the region, and progress on electricity and gas interconnections. Environment issues on the agenda include energy efficiency, climate change, and renewable energies such as bioenergy.
In July 2005, Russia announced that work to build a 5 billion euro gas pipeline to link St Petersburg to the German town of Greifswald under the Baltic Sea would begin in September (the North-European pipeline project). The Baltic route was preferred to alternative ones under the Amber and Jamal-Europe 2 projects originally foreseen to run through Poland, Lithuania, Latvia and Belarus.
Arctic energy Agenda
A first round table of political and industrial decision-makers from Norway, Russia, the US and the EU took place on 7 July 2005. "The Artic region is believed to be one of the most important remaining petroleum provinces," the participants stated in a declaration after the meeting. The Barents Sea, it was added, "represents an opportunity to become a new European petroleum province". The declaration highlighted the vulnerability of the marine environment as a particular challenge to the development of industrial activities in the Arctic.
EU-Norway energy dialogue
Norway is the world's third exporter of natural gas and a major supplier of oil and gas to the EU. A meeting between Energy Commissioner Andris Piebalgs and the Norwegian Minister of Petroleum and Energy on 6 July 2005, confirmed both sides interest to cooperate on energy issues. The two sides agreed to strengthen cooperation on energy efficiency, renewable energy, and security of energy supply, including exploration and production activities in the Arctic area. Agreement was reached that the Commission would join an informal forum established by Norway, the UK and Denmark to discuss issues related to the use of CO2 for enhanced oil recovery and storage in the North Sea. EU-Norway meetings will from now on take place on an annual basis.
With countries such as Angola and Nigeria now in the league of major global oil suppliers, other countries in the Gulf of Guinea are seeking to emulate their success. EU relations with the region have been centred on development cooperation with the Economic Community of West African States (ECOWAS), in particular on issues such as peace, security and good governance aspects with a strong emphasis on economic and trade integration. Since January 2007, representatives from both sides have been engaged in more intensive discussion on the possibility of creating an Africa-Europe Energy Partnership (EURACTIV 11/01/07).