THE KAS ENERGY SECURITY FELLOWSHIP PROGRAMME – ANNOUNCEMENT

14. Mai 2012 By

 

 

THE KAS ENERGY SECURITY FELLOWSHIP PROGRAMME

The Konrad-Adenauer-Foundation funds a 12 months research stay for a European Union (EU) resident research Fellow at the European Centre for Energy and Resource Security (EUCERS) at King’s College London. The Fellowship includes a stipend of €25,200 (€2,100 per month) for the fellow, a conference subsistence of €1,257 and will pay for University fees.

The topic of this year’s Fellowship is

“The Arab Spring and its impact on supply and production in global markets.”

Application deadline is on 15 June 2012. After reviewing applications, several candidates will be invited for interviews. The location may vary depending on availability of members of the selection committee and are either held in Berlin or London. The decision of the committee will be communicated to the successful applicant in writing by 1 July 2012. The scholarship starts on 1 September 2012.

The Fellow will be expected to draft a confidential report, available to KAS and EUCERS. Furthermore, the Fellow will be required to write a 35-50 page research paper (in German or English), for which KAS and EUCERS get the (publishing) rights. A publication can be in print or online. The opportunity to present the results of the research in conferences by KAS or EUCERS may develop within this framework. Cooperation beyond this between the scholar, KAS and EUCERS are subject to mutual agreement and encouraged.

To apply please send your application to carola.gegenbauer@kcl.ac.uk and cc’d to kas-uk@kas.de including:

  1. A cover letter
  2. A description of the research project together with a time schedule
  3. A motivation letter explaining why a research stay in London is suitable for the candidate’s research project as well as key areas of the planned research
  4. A curriculum vitae with detailed explanations regarding personal and academic background, dated and signed
  5. A short personal data sheet
  6. A copy of transcript of record (a certified copy will have to be brought to the interview)
  7. At least one reference from a Professor
  8. Proof of very good knowledge of English (TOEFL, IELTS)

For further information please contact Carola Gegenbauer on +44 (0)20 7848 1912 or carola.gegenbauer@kcl.ac.uk.

Filed Under: EUCERS NEWS

Frank Umbach in Natural Gas Europe: Going for the Equilateral Triangle

9. Mai 2012 By

 European Energy: Going for the Equilateral Triangle

Please find the original article on www.naturalgaseurope.com

3. May 2012

The lengths of the sides of an equilateral triangle are all the same.

That’s how Europe’s “energy triangle” should look, according to Frank Umbach, Senior Associate and Head of the Programme “International Energy Security” at the Centre for European Security Strategies, who presented an European Centre for Energy and Resource Security (EUCERS) strategic paper on unconventional gas at the Unconventional Gas & Oil Summit in Warsaw, Poland.

“Let me start with the uncertainties regarding the EU’s future energy security,” he said.

The triangle Mr. Umbach presented comprised environmental issues, security of supply, and economic competitiveness. He said it was necessary to balance those issues instead of favoring one or the other, especially given that Europe’s energy imports were set to increase from 50% to 70% by 2020.

“Very often, like in my own country of Germany, the environmental or climate policies very often determine the other two factors rather than balancing the other two objectives.”

He said that EU policy focused on domestically produced greenhouse gas emissions.

His presentation showed that more than 80% of natural gas was coming from three countries, in contrast to how the pie was made up for EU crude oil imports.

“There’s recognition in the European Commission by increasing LNG supplies from a variety of players,” he commented, showing a list of LNG terminals that were in the planning stages, increasing to more than 20% of supply in 2020 from 10% in 2009.

“I am more optimistic about the global and European prospects for unconventional gas,” he said. “In 2005-06 the production prices in the US were 50-60% higher than they are today, so that time and situation were not so different from the situation we have here in Europe despite the fact that there are many differences.

“The percentage for Europe is rather small compared with the overall global figures; the Middle East has a higher figure, interestingly. In North America being a net gas exporter by 2016 is currently being discussed. Australia will become a bigger LNG producer than Qatar by 2018-19 and might also be a very important producer of unconventional gas in the mid term perspective,” he added.

“The Asian growth of unconventional gas will outpace all other regions, increasing to more than 55 bcm by 2020,” which he said might be a bit optimistic.

Umbach continued: “This all has already had a pricing impact in Europe, where there is a gas glut.”

He highlighted what he said were a number of environmental challenges and concerns. “There are a number of new analyses which are addressing the risks – there are of course risks, but in many respects the risks are overstated, which is the conclusion of a number of independent studies that are not present in the public discussion.”

In terms of prospects for Europe, he said situations like the one in France contrasted with the picture in Poland.

“Here in Poland the new estimate has been significantly decreased, but again we’re at the very beginning of the debate, which again reminds me of the years 2005-06 in the US. Through technology innovations the prospects are not so bad. The situations like the one in Bulgaria could change in the coming years.”

“Unconventional gas will definitely support supply security as well as economic competitiveness,” he said. “Even in regard to environmental climate change mitigation it will be interesting to see those debates in the coming years, because if you compare it with the import of pipeline gas, particularly from new Siberian field, the CO2 emissions could be 30% lower than Russian long distance pipeline gas, according to a life cycle analysis.”

Of other positive developments for European gas sources, he mentioned another possible area, the East Mediterranean Sea/Levant Region, where gas fields had been discovered.

Of there and the Middle East, Umbach commented, “Gas finds don’t just depend on the technological drilling expertise of companies, but also on geopolitical conditions – there’s a maritime agreement between Cyprus and Israel being signed, but Turkey opposes many of the Cypriot gas projects, so maritime boundaries have not been agreed and that would definitely hinder a number of investments in the years to come. If the political conditions were better, the prospects for the gas fields would certainly be more positive. Israel is already discussing whether it will be just an importer or could be an exporter of natural gas.”

Regarding EU climate targets, and looking at figures from the IEA, he said Europe was not really on its way to the “450 Scenario.”

“If we take three 20% goals of the EU policy,” he said, “the ‘renewables goal’ is seen by the Commission and by industry as realistic; we will probably surpass that 20% target significantly. In contrast we see the 20% goal for efficiency doesn’t look so positive today.”

He offered what he thought this portended for overall gas demand in Europe, projected to go up from 330 bcm of gas demand to beyond 500 bcm by 2035.

According to him, overall energy demand would decrease as well as gas demand. But uncertainty remained.

“With the phasing out of nuclear, Gazprom had hopes to increase volumes,” Umbach recalled. “The economic reality in Germany is that almost no gas power station is being built for guaranteeing baseload stability. These would only run a few hours per day, which is not profitable at all for any kind of private investors.”

Then he said there was the question of the Southern Gas Corridor.

“If you add the new pipelines, TANAP, non Russian gas and add LNG expansion, taking into account imports from Norway, you come up with more than 300 bcm of oil and gas projects available,” he noted, adding that resource estimates for Turkmeni gas were looking even more positive.

He continued, “Azerbaijan has discovered new gas fields in the last year and a half. Their exports to Europe or to other places will increase.”

Please find the original article on www.naturalgaseurope.com

Filed Under: EUCERS NEWS

Frank Umbach quoted in Manager Magazin Germany

29. Februar 2012 By

Frank Umbach in Manager Magazin, 24 February 20122: Planned pipeline projects like the Trans-Adriatic Pipeline (Tap) supported among others by the German utility Eon or the South-East Europe pipeline (Seep) promoted by the oil company BP have the disadvantage that they put on the existing pipeline network in Turkey. “This could be a miscalculation.” After all, the existing east-west Turkish pipeline for export be used in Turkey would have to look for alternative costly alternatives. Apart from the specific route for the above projects is not yet clear.

Haggling to 2013

Umbach considers the The TANAP project as a serious alternative to Nabucco, at least for the transit through Turkey. Especially as the Turkish-Azerbaijani pipeline could increase from previously projected 16 billion cubic meters of gas per year up to 30 billion cubic meters. “The original Nabucco pipeline would become obsolete.” Among the project participants keywords such as “Nabucco West” or “Nabucco short” already circulate, “says Umbach.

The disadvantage of such a development, however, lies on hand. “The original strategic argument about different gas suppliers such as Turkmenistan, Kazakhstan, Iraq, Egypt and Iran to achieve diversification would fall away.” Instead, the Europeans would in practice depending on Azerbaijan.

However, the building of TANAP would also offer benefits according to Umbach. “For Nabucco would have expected to bridge the only route from Turkey to Central Europe.” The pipeline would reduce the costs for the consortium – experts estimate it at up to 15 billion € . For the project participants, as the Austrian OMV, Turkey’s Botas, Hungary’s MOL, Bulgarian Bulgargaz, Romanian Transgaz and German RWE would be tempting in view of energy policy and scarce corporate funds.

Click here for the full article on manager-magazin.de

Filed Under: EUCERS NEWS

TANAP agreement fundamentally changes situation around bringing Caspian gas to Europe – Interview with Frank Umbach in TREND

17. Februar 2012 By

Intervie withFrank Umbach in Trend News Agency, a leading news provider from the Caucasus, Caspian and Central Asian regions17. February 2012

The TANAP agreement has fundamentally changed the situation around bringing Caspian gas to Europe, Frank Umbach, Senior Associate and Head of the Programme “International Energy Security” at the Centre for European Security Strategies (Berlin) told Trend on Thursday.

This agreement changed the situation much more than BP’s proposal for the the South-East Europe Pipeline (SEEP), said Mr Umbach who is also Associate Director at the European Centre for Energy and Resource Security (EUCERS) at the King’s College, London.

Azerbaijan and Turkey signed a memorandum of understanding to establish a consortium. It will build a pipeline to supply gas from the “Shah Deniz” field in Europe through the Turkish territory.

The expert said the TANAP pipeline also means that a shorter and cheaper Nabucco-pipeline version needs to build (some representatives already called it “Nabucco-West” or Nabucco-short”)

“The TANAP will lessen the Nabucco’s (original) strategic value, given that the major control of the Shah Deniz II gas exports via the TANAP pipeline will lie almost exclusively by Azerbaijan itself rather than by a European Pipeline Consortium. But the TANAP pipeline does not correct the overall strategic objectives of the Southern Corridor project to bring Caspian gas to Europe and to diversify the EU’s rising gas imports,” Mr Umbach said.

Nabucco gas pipeline is designed to transport gas from the Caspian region and Middle East to the European countries. The launch of construction is scheduled for 2013, the first supplies via this pipeline are scheduled for 2017. The project’s partners include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and the German RWE.

“I think the original Nabucco-Project is no longer realistic. But the overriding strategic interest of the EU to bring Caspian gas to Europe has become more realistic with the TANAP pipeline,” Mr Umbach told Trend.

He noted more uncertainties have emerged with one of the strategic aims of the European Commission’s Southern Corridor project and the Nabucco-pipeline, namely the Trans-Caspian Pipeline.

The expert believes Azerbaijan has meanwhile much more gas available also from other newly found gas fields (Absheron, Umid etc.) for its future gas exports.

“It’s no longer the 10 bcm of the Shah Deniz II, which matters and play the only significant role for filling a strategic pipeline to Europe,” Mr Umbach said.

He said however the EU’s strategic interest to bring Turkmen gas via a Trans-Caspian pipeline has not changed nor the interest of the Turkmen government to diversify its gas exports as much as and as soon as possible.

The Turkmen President has declared last December that the export of Turkmen gas to Europe is currently the most important foreign policy objective of his country.

Mr Umbach noted Azerbaijan and Turkey have also repeatedly declared that they want also become a major transit state for gas transports from Turkmenistan and other Central Asian gas exporters.

Furthermore, blocking the Transcaspian pipeline project from Azerbaijan and Turkey would have major foreign policy and economic implications in their bilateral relationships with Turkmenistan, he believes.

He also said both countries (Azerbaijan and Turkey) have also no strategic interest that Turkmenistan would become totally dependent on Russia.

“Thus all three – the EU, Azerbaijan and Turkmenistans – have a common long-term strategic interest far beyond the pipeline discussions of bringing Turkmenistan closer to Europe and maintain a goof and strategic relations with Turkmenistan. Given the European Commission’s direct negotiations with Turkmenistan since last September, the EU’s repudation and credibility is at stake – in particular because Turkmenistan is already building an internal East-West gas pipeline to fill a future Transcaspian pipeline to Azerbaijan,” Mr Umbach said.

The contract to develop the offshore Shah Deniz field (1.2 trillion cubic meters of gas) was signed June 4, 1996. Participants to the agreement are: BP (operator) – 25.5 percent, Statoil – 25.5 percent, NICO – 10 percent, Total – 10 percent, LukAgip – 10 percent, TPAO – 9 percent, SOCAR-10 percent.

ITGI and TAP realistic as complementary projects with Nabucco

ITGI and TAP are only realistic as a complementary project with Nabucco, but not with South Stream, Senior Associate for International Energy Security at the Centre for European Security Strategies (Berlin) Frank Umbach told Trend on Thursday.

With the EU’s 20-20-20 programme, the EU’s energy and gas demand will significantly be lower than forecasted until 2006. Thus the expansion of LNG-imports as well as the Nabucco-pipeline was already no longer viable before the European Commission’s decision of last December to block Gazprom’s acquisition attempt of a 50% stake at the Central European Gas hub (CEGH) in Baumgarten (Austria), where the Nabucco-pipeline would end,” Mr Umbach said who is also Deputy Director of the European Centre for Energy and Resource Security (EUCERS) of the King’s college (London).

He said thus there will be no transit of the South Stream pipeline through Austria any longer, only a small spur.

“The South Stream pipeline will now terminate in Italy (which would hardly need the full capacity of South Stream, which was foreseen as the main customer of the ITGI and TAP-pipeline. Furthermore, the European Commission’s position was already before the December decision on South Stream that the Nabucco-pipeline and the ITGI and TAP-pipeline projects should merge in one or another way,” Mr Umbach said.

“Southern Gas Corridor” is one of the priority energy projects for the EU. It is intended to diversify the routes and sources of supply and thereby increase the energy security of the EU. The ‘Southern Gas Corridor” include: Nabucco gas pipeline, Trans Adriatic Pipeline (TAP), ITGI (Turkey-Greece-Italy pipeline),”White Stream”.

The “South Stream” project is implemented in order to supply Russian gas to European consumers. For the implementation of the onshore section Russia signed intergovernmental agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria. The project’s participants are “Gazprom” (50 per cent), the Italian Eni (20 per cent), German Wintershall and French EdF (15 per cent each).

It is planned that the pipeline will consist of four branches, each containing15.57 billion cubic meters. Commissioning of the first of them is scheduled for December 2015, the output at full capacity (63 billion cubic meters) is expected by 2018. The estimated cost of the “South stream” is 15.5 billion euros, 10 billion of which fall to the marine area, and 5.5 billion – to land.

Filed Under: EUCERS NEWS

Iran Sanctions: Right Intent, Wrong Approach by Friedbert Pflüger in the European Energy Review

16. Februar 2012 By

Viewpoint by EUCERS director Friedbert Pflüger in the European Energy Review, 16 February 2012

While the oil boycott the US and EU have instituted against Iran is understandable, in view of the repulsive nature of the Iranian regime, it will end up hurting the West rather than the rulers in Tehran, argues Friedbert Pflüger, Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College London. According to Pflüger, the West should deal with Iran the way it dealt with the Soviet Union during the Cold War: with a policy of containment and cooperation, particularly in the energy sector. “While the dangers and malicious character of the ruling regime should not be watered down, stronger economic cooperation, like for instance the ‘gas for pipes’ deal in 1970 between Germany and Russia, should be pursued.”

There is no denying the unpleasant nature of the ruling regime in Tehran given the country’s long-track record of state-sponsored terrorism, domestic human rights violations, and illicit activities over the past thirty years. Add to that the fiery and provocative rhetoric of its Holocaust-denying President Mahmoud Ahmadinejad and a recent report from the IAEA in November 2011 which suggested that Iran had carried out tests “relevant to the development of a nuclear explosive device”, and you end up with the current stand-off in one of the most volatile and, at the same time, important geopolitical regions in the world.

The IAEA report has prompted the US and the EU to impose their harshest sanctions on Iran to date by prohibiting the import, purchase and transport of Iranian crude oil and petroleum products effective July 1, 2012. Related financial and insurance industries will also be restricted by the new measures, as well as the country’s petrochemical sector, the central bank and Bank Tejarat, the last large Iranian state bank still operating in the EU. Iran has responded in kind by threatening to block the Strait of Hormuz, through which 20% of the world’s traded oil flows as well as significant volumes of liquefied natural gas (LNG). The US, on the other hand, has pledged to keep the trade route open, raising the likelihood of a confrontation.

However, given Iran’s past ability to weather previous sanctions and even utilize them for political gain domestically, it begs the question: Are the latest round of sanctions, and the ensuing escalation of tensions, the right approach to finding a solution to the Iranian nuclear issue?

Global economy

Judging from prior experience it could very well be that the embargo will effect no (desired) change in Iran and worse, impel it to adopt an even greater hard-line stance while inflicting damage on Western economies in the process. Sure, leaders on both sides could stand to benefit politically. In the West, presidents Obama and Sarkozy are facing elections this year and being tough on Iran is usually good for the poll numbers. Iranian President Ahmadinejad, on the other hand, has lost a lot of popularity in his own country and needs foreign adversaries on which he can place the blame for Iran’s domestic woes. Economically, however, both sides stand to lose, and the West even more so than Iran, at least over the short-term. The latest sanctions seem to be guided more by political motivation and do not fully take into account the economic ramifications such a move will have on the global economy.

The embargo, which will go into effect in July, will very likely have a negative impact on the world economy by placing additional strain on oil supplies and pushing prices higher (oil prices have already risen due to increasing tension and the expected impact of an EU oil embargo), hence slowing growth and making it that much more difficult for economies still reeling from the global financial crisis to recover. This is especially true for countries in financially-troubled Europe, some of which are currently undergoing strict austerity measures. The Libyan oil supply disruption in the spring of 2011 is a case in point and may just have been a small foretaste of what we can expect in the near future.

Libya produced around 1.5 million barrels of oil per day (mb/d) in 2010. Following the drop of Libyan oil output in February 2011 as a consequence of the conflict, production declined to a mere 169,000 b/d inMay, which resulted in a loss of more than 1.3 mb/d and added up to a loss of approximately 132 million barrels by the end of the same month. And while Libya exported the bulk of its oil, some 85%, only to Europe prior to the conflict (Libyan oil accounted for nearly 11% of total EU imports in 2010: Italy 28%, France 15%, Germany and Spain 10%, Greece 5%, and UK 4%; the US only imports 3% from Libya), the supply disruptions were felt worldwide due to the intertwined nature of international oil markets as Europe’s search for replacements placed additional strain on global supply.

Oil prices jumped from $92 a barrel in January 2011 to a high of $116 in April, despite the spring being a low demand season, before going back down to an average of $103 for the second half of the year after the IEA decided in June to coordinate the release of 60 million barrels of strategic reserves in order to ease fears in the international oil markets and to prevent additional downward pressure on economic growth due to the Libyan supply disruptions. This was only the third time there had ever been a release of emergency petroleum reserves, after the First Gulf War in 1991 and for Hurricane Katrina and Rita in 2005; the release was met with disapproval from both private oil companies who did not like the government interference in markets and some OPEC member countries that deemed the move to be unnecessary. (See Devin Glick, A Look at the IEA 2011 Release of Strategic Oil Reserves)

Iran’s oil production is more than double that of Libya’s, with a current output of approximately 4 mb/d, and it is the world’s third-largest net exporter of oil with some 2,2 mb/d. Should Iran be able to make good on its threat to block the Strait of Hormuz as a reaction to the sanctions, it is safe to assume that any ensuing disruptions in oil supply from Iran and the region would have a significantly harsher impact on oil prices and the global economy than the Libyan disruption last year. It is also doubtful that the available strategic reserves in the West would have the same cushioning effect as they did in the case of Libya, as the blow to global oil supply from a loss of Iranian oil would be considerably more difficult to absorb. Of course, European countries would not be the only ones affected by potential flow disruptions in the Strait of Hormuz. China is Iran’s biggest customer and imports 10% of its oil from Iran, as does India, while Japan and South Korea import 11%. In addition, Japan and South Korea purchase significant volumes of LNG from Qatar, which also flow through the strait. However, the blockage of the Strait of Hormuz is highly unlikely as Iran would in effect be shooting itself in the foot by blocking its own exports, which constitute 50% of government revenues, to countries that would still be willing to purchase their oil despite the sanctions.

Biggest buyers

Even if it does not come to flow disruptions and exports are “only” redirected to other destinations, the embargo will still have a profound impact on countries that are particularly dependent on oil from Iran and choose to enforce the sanctions. While the US stopped importing Iranian oil in 1987 and the EU currently imports about 450,000 b/d from Iran (only about 4% of its foreign oil), it is the concentration of these imports that are of significance.

Three southern European countries, namely Italy, Spain, and Greece, are the biggest buyers of Iranian crude in Europe and account for over 70% of the EU’s imports from the country; presently, Greece imports about a third of its oil from Iran, Italy 13% and Spain 12%. The refineries in these countries, which are already suffering from financial problems, will be particularly hard-hit by the sanctions because they cannot easily find replacements for Iranian type crude. And while importing EU countries that adhere to the oil ban rush to find alternative supplies, likely at higher prices, competitors in Turkey and North Africa are exempt from the embargo and can continue to purchase cheaper crude from Iran.
Another issue compounding the problem is that several EU countries have had their credit ratings downgraded in the last couple of months – five just recently including Spain and Italy. This means the oil they have to replace is going to cost a good deal more at a time when their budgets are already heavily burdened.

Greece, which has no domestic oil production and is in the midst of the worst financial crisis in its modern history, may end up suffering the most. According to EU data, the country imported 46% of its oilin 2010 from Russia, 16% from Iran, 10% from Kazakhstan and Saudi Arabia, 9% from Libya and 7% from Iraq. Due to its sovereign debt crisis and increasing fears of a Greek default, many banks have refused to provide financing for the country, which has forced Athens to stop purchasing oil from Russia, Kazakhstan, and Azerbaijan, hence increasing dependence on Iranian imports in recent months due to its more lenient payment policy. However, with the Iranian oil embargo coming into effect in July, Greece would stand to lose another major source for its oil imports; this would almost certainly worsen the fragile state of the Greek economy even further.

Finding replacements in time is another issue. One of the primary reasons for the July deadline was to provide states that are heavily dependent on Iranian crude with adequate time to find alternative supplies. However, some countries may have to look for replacements much sooner because Iran has threatened to cut off its oil exports before the deadline. An abrupt cessation of Iranian oil supplies to the recession-plagued economies of the EU would lead to steep price increases at a time when people can least afford it, thereby potentially sparking widespread public discontent and, again, severely hampering recovery efforts.

Moreover, Iranian oil has already started flowing to other demand centers. According to the US Energy Information Administration (EIA), in 2011 China, India, and South Korea increased their imports of Iranian crude, as oil volumes were reallocated to countries that imposed less severe sanctions on Iran. This indicates that a gradual shift of Iranian oil eastwards may already be taking place and the latest sanctions will provide a further impetus for that trend to continue. India, China and Turkey have refused to join the sanctions and are searching for alternative ways to pay for Iranian crude. India’s current plan is to pay Iran in gold for its oil in cooperation with Turkey through two state-owned banks, India’s UCO Bank and Turkey’s Halk Bankasi. China has indicated it may follow suit.

Escalation of tensions

Previous sanctions against Iran have actually created more opportunities for trade with China. As sanctions have driven away many international companies from the Iranian market, Chinese companies have capitalized on the opportunity to seize a larger market share. Over the past decade, the volume of bilateral trade between China and Iran has increased from US$2.5 billion in 2000 to US$29.3 billion in 2010. The newest set of sanctions will undoubtedly strengthen ties between the two countries even further, which could have potential long-term geopolitical ramifications irrespective of the government in power. Would such developments be reversible if regime change in Iran were to occur?

And how durable is the alliance between the Gulf States and the West? Most of Iran’s neighbors in the Gulf region are wary of its growing power, but would only grudgingly support military intervention. Qatar, for instance, is continually working towards improving relations with Tehran despite their differences – they are not interested in a further escalation of tensions, and understandably so, considering the close geographical proximity of the two countries.

Ironically, the sanctions may even serve to play a stabilizing role for the regime in Tehran and boost Ahmadinejad’s standing domestically. The regime lost a lot of credibility at home after the disputed 2009 presidential elections, so they will surely want to exude a position of strength now by not giving in to foreign demands on an issue that is viewed as a matter of national pride by both hardliners as well as reformists alike.

What is more, the escalating tensions between Shiite-dominated Iran and the West could have an impact on other Middle Eastern states with significant Shiite populations like Syria, Bahrain, and Iraq, who may sympathize with Iran’s predicament and take up its cause, leading to further radicalization in the region.

Let it be clear that there can be no illusions regarding the malevolent nature of the ruling theocracy in Tehran. The recent case of a German reporter who was beaten by guards during his five-month imprisonment in Iran and his account of the “horrible screams” emanating from a neighboring prison cell is yet another stark reminder of that.

However, the sanctions that have been undertaken must target the regime specifically and not the states imposing them. Ultimately, the arguments for the new sanctions are not convincing enough and are more an expression of helplessness rather than resolve. There is no indication that they will force Iran to bend this time around, rather the opposite is more likely. Instead, A NATO policy that was employed during the Cold War to ease East-West tensions could prove to be similarly effective in solving the current impasse between the West and Iran, although it must be said that the two cases cannot be compared one-to-one.

New incentives

The Harmel Doctrine of 1967, which was contained in the report “Future Tasks of the Alliance” drafted by then Belgian Foreign Minister Pierre Harmel and submitted to NATO, advocated a strong national defense, a firm stance against military build-up as well as good diplomatic relations with the countries of the Warsaw Pact. The NATO council of ministers decided to adopt the doctrine, which eventually helped to pave the way for the East-West détente of the early 1970s and led to the Helsinki Accords of 1975. The Accords marked the beginning of significant improvements in relations between the Soviet bloc and the West and brought human rights to the forefront of the East-West agenda.

A similar policy of containment and détente is needed in the case of Iran. While the dangers and malicious character of the ruling regime should not be watered down and open criticism of the gross violation of human rights in Iran must be resolutely maintained, stronger economic cooperation, like for instance the “gas for pipes” deal in 1970 between Germany and Russia, should be pursued. Such a strategy would by no means serve to appease the regime but, rather, help to contribute to a growing and self-confident middle-class in Iran, which is the ultimate long-term driver of regime change. A policy of isolating Iran will only lead to one thing – the weakening of the Iranian middle class, which constitutes one of the strongest and most vocal segments of the opposition within the country.

It is true that Iran has rejected previous political and economic incentive packages from the West, China, and Russia in exchange for the suspension of uranium enrichment, most recently in 2008. Nevertheless, it is necessary to offer new incentives recurrently, especially now in light of the possibility of a military escalation.

One of the most enticing, and mutually beneficial, incentives the West could offer Iran is improved cooperation in regard to energy. Iran’s proven oil reserves of approximately 137 billion barrels (about 10% of the world’s total oil reserves) and current production rate of some 4 mb/d imply a reserves-to-production ratio of over 85 years, which indicates good prospects for production growth. Moreover, there is plenty of capacity to increase production as evidenced by the rate of new, large discoveries that have been made over the last 15 years, for instance in Azadegan, Hosseineh, and Kushk – all situated in the Zagros Basin, one of the main producing regions in the southwest of the country. This suggests that there is considerable potential for additional finds there, as well as in other less-explored parts of the country including the Main Central Basin, offshore in the Persian Gulf, and to the north in the Caspian Sea.

However, the country’s energy sector is plagued by massive problems, largely as a result of international sanctions. Currently, Iran’s oil fields have a relatively high decline rate of over 7 percent per year and low recovery rates of only about 20-30 percent. In addition, its main producing fields are well past peak production and in decline, resulting in a loss of about 400,000-700,000 bbl/d of crude production annually according to the EIA.

Moreover, most of the production increase since the 1990’s in Iran can be attributed to foreign investments including Sirri A & E (Total), Soroush-Nowruz (Shell, 150kb/d), South Pars 2&3 (Total, 112kb/d), South Pars 4&5 (Eni, 112kb/d), Darquain (Eni, 110kb/d), and Doroud (Eni, Total, 150kb/d). Without the participation of international oil companies (IOCs), Iran’s oil production would most likely have stagnated or even decreased from the 1990s on. Since then, few contracts have been signed between IOCs and Iran as a result of the sanctions; there are currently only a small number of upstream projects in development while ongoing projects have been hampered by a lack of foreign investments, technology and expertise. (See Energy Information Administration, Iran Country Analysis)

Buyback contracts

The country’s gas sector also has considerable potential for growth, especially in regard to LNG, but faces similar impediments like the oil sector due to the sanctions. The massive offshore South Pars field, which Iran shares with Qatar, has approximately 870 trillion cubic feet of largely untapped reserves, making it largest single gas field in the world. Whereas Qatar has utilized its share of the field (known as the North Field in Qatar) to become the world’s largest LNG exporter, Iran’s progress to date can only be termed modest at best. Its four LNG projects including Pars LNG, Persian LNG, NIOC LNG, and its 2006 MOU between NIOC and CNOOC to develop an LNG facility are still in the developmental stages and continued progress is highly uncertain.

Ultimately, real and significant developments in Iran’s energy sector can only be made possible by the availability of substantial foreign investments and the participation of IOCs which have the necessary technological expertise to exploit new and untapped reserves situated in geologically challenging terrain, maximize production levels, and enhance efficiency.

Improving energy cooperation will not only bode well for Iran’s energy sector in terms of increasedgrowth and production, but it also offers the West and the international community significant benefits such as new business opportunities and increased oil and gas supplies, which could serve to ease global demand and put downward pressure on prices. Hence, it is vital that the vast resource potential and the fruits that mutual energy cooperation can bear be both recognized by the West as well as clearly communicated to Iran.

Even if access to Iran’s energy sector would still remain relatively restricted to IOCs due to an investment regime based on buyback contracts and stipulations in its constitution, the temptation to re-vamp and modernize its oil and gas production facilities may persuade Tehran to make alternative concessions such as opening up other sectors of its economy. This would serve the same purpose of facilitating freer trade, a greater exchange of goods and services, and, inevitably, an increase in the flow of information which would ultimately help to strengthen the middle class.

The current sanctions strategy, on the other hand, is a prelude to a further escalation of the conflict, which could eventually lead to military action or even outright war – to the detriment of both sides. Given the volatile situation throughout the Middle East and North Africa, one can only hope that responsible statesmanship tries as much as possible to avert such a scenario.

Please click here to read the article on www.europeanenergyreview.eu

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The need for a common EU nuclear policy – Interfax Interview with Frank Umbach

3. Februar 2012 By

Dr. Frank Umbach is an expert on EU energy policy and was invited to speak in last week’s EU parliamentary debate on external energy relations. He is associate director at the European Centre for Energy and Resource Security, King’s College, London and senior associate at the Centre for European Security Strategiesin Munich. Andreas Walstad asked him about the EU’s sanctions on Iran, relations with Russia and the lack of an EU-wide nuclear policy.

Interfax: To what extent will the European Commission’s legislation on Intergovernmental Agreements strengthen security of supply in Europe?

Frank Umbach: An information exchange mechanism on inter-governmental agreements between member states and countries outside the EU is a pre-condition for the functioning of a common energy policy and a united EU energy market. One example of where the Commission helped secure a deal on energy is the 2010 Polish-Russian gas agreement. But its involvement came very late, at the end of the bilateral negotiations, so it is hardly a model for the future.

Associate Director at the European Centre for Energy and Resource Security King’s College London, Dr Frank Umbach.

If the Commission is not given information from the start about bilateral negotiations, concessions that are made before its involvement may not be reconcilable with the EU’s internal community law, such as the third-party access clause. Early involvement of the Commission not only improves transparency but provides investors and third parties with important legal certainty and shortens the negotiation process. Ultimately, the EU is only as strong as its member states allow it to be. If the Commission’s proposals are supported and implemented by the member states, they could dramatically transform the EU’s foreign energy policies.

Interfax: Oil-indexation of gas contracts has in some countries, such as Germany, caused headaches for gas-fired power generators. In your view, should the EU get more directly involved in these issues?

FU: The European energy companies need to solve this dispute themselves with Gazprom by re-negotiating the gas contracts. But if this option is not possible or does not produce positive results, the EU might intervene diplomatically.

Interfax: Are sanctions on Iran and Syria justified in your view? Can we expect the EU to carry out sanctions against gas exporting countries too?

FU: Given the security risks in the Gulf region, I think it is justified since Iran is not really willing to cooperate and find a diplomatic solution. For some EU countries, such as Greece, it will be much more difficult to find alternative oil imports in time. But the Western countries all have strategic oil reserves for at least 90 days. How effective the sanctions will be, however, depends not so much on the United States and the EU, but other big importers of Iranian oil – i.e., Asian states and China in particular.

Of course, any sanctions against major gas exporting countries would be more difficult, in particular if EU countries are totally or primarily dependent just on pipeline gas and have no access to LNG imports. There is always an element of ‘double standards’ in Western foreign policy.

Interfax: In September last year, the EC secured a mandate to negotiate the possible construction of a Trans-Caspian pipeline between Turkmenistan and Azerbaijan. Was this a necessary move and is this project realistic?

FU: Turkmenistan explicitly requested that the EU was involved in this project. The EU Council of Ministers gave the Commission a formal mandate for these negotiations, despite strong protests and warnings from Russia. The Turkmen president has declared, against all threats from Russia, that this pipeline project is the country’s most important “foreign policy objective”, which reflects its overall objective to diversify its gas exports and to reduce its dependence on Russian gas export pipelines.

The project is realistic given the common strategic interests of Turkmenistan and the EU. The question is whether Azerbaijan still recognises the same strategic interest given its newly discovered gas fields: Azeri-Chirag-Guneshli and Umid. The Commission believes that a final positive decision on the Trans-Caspian pipeline can be made next June. Furthermore, Azerbaijan (like Turkey) and the State Oil Company of the Azerbaijan Republic have declared Azerbaijan will be a major transit state for Turkmen and other foreign gas supplies to Europe. In contrast to some years ago, the bilateral relationship between Azerbaijan and Turkmenistan has been significantly improved during the last two years. If a Trans-Caspian pipeline won’t be built, the overall bilateral relationship may deteriorate again, which is neither in the interest of Azerbaijan nor Turkmenistan, and also not for Turkey.

Interfax: Germany’s nuclear exit was done without consultation with the EU. Should there be a common EU policy on nuclear energy?

FU: We need a common energy policy in general and for all energy sources – not just for nuclear energy. Every EU country needs to recognise that its energy policies will have direct and indirect impacts on neighbouring EU member states as well as to the common EU energy policies.

As Europe’s leading electricity exporter until the spring of 2011, the impact of Germany’s nuclear shutdown does not end at the German borders. It will automatically affect the electricity supply and grid stability of its neighbours – a fact that has been completely ignored by the German government.

Overall, as the result of Germany’s abandonment of nuclear power, the EU common internal electricity market needs to cope with a 5% shortfall of electricity production.

While Germany has the sovereign right to make its own energy choices about its national energy mix, it has done so at the expense of others. The German government has violated the principle of ‘political solidarity’, enshrined in the EU energy common policies and the Lisbon Treaty. The ‘energy article’ in the Lisbon Treaty clearly stated that any national energy decisions need to be made in “a spirit of solidarity between member states” to “ensure the functioning of the [internal] energy market” and “security of supply in the Union”.

 Please click here for the Interview at Interfax

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The Southern Gas Corridor: Reaching the Home Stretch by Friedbert Pflüger in the EER

16. Januar 2012 By

After many years of speculation about possible gas pipelines to be built in the so-called Southern Corridor, a first likely winner will be announced shortly. It probably won’t be the EU-backed Nabucco nor the Russian-backed South Stream, but the much less ambitious Trans Adriatic Pipeline (TAP), owned by Eon, Statoil and EGL. This is the prediction of Friedbert Pflüger, Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College London. In this article written for EER, Pflüger, who served for twenty years as a Member of Parliament and was State Secretary in the first Merkel government, explains why the Southern Gas Corridor is crucial to Europe’s energy future and how it is likely to develop.

There have been lengthy speculations in recent years about the Southern Gas Corridor – seemingly endless discussions about various pipeline concepts, and their geopolitical meaning and economic feasibility. This is understandable, as the different projects have numerous stakeholders, including transit governments, gas buyers, transportation companies and international financial institutions that are involved in project-financing. But these discussions will soon come to an end – at least for the time being. This is because the consortium operating the Shah Deniz II gas field in Azerbaijan, which needs to come on stream by 2018-2020, will shortly have to announce how they will arrange for the transport and sale of 10 billion cubic metres (bcm) of gas annually – the first and, for now, the only major non-Russian gas supply that will traverse the Southern Corridor. Taking into account all the pros and cons of the pipeline projects downstream of Turkey, the most likely winner of the first leg of the race will not be Nabucco, the Interconnector Turkey-Greece-Italy (ITGI), or South Stream but rather the Trans Adriatic Pipeline (TAP).

 

please click here to view the full text

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New stability and prospects for Kurdish oil and gas – European Energy Review

9. Dezember 2011 By

5 December 2011

by Friedbert Pflüger and Arash Duero

ExxonMobil has become the world’s first major international oil company to venture into Iraqi Kurdistan. ExxonMobil’s bold move may be seen as a validation of investor confidence in Iraqi Kurdistan’s economic progress. It may even signify that the Kurdistan Regional Government (KRG) is inching closer to reaching an agreement with the central government in Baghdad on the long-standing dispute over the ownership and revenue sharing of the region’s hydrocarbon resources. It is high time for European policymakers and businesses to start engaging themselves with Iraqi Kurdistan – as the US, Turkey, Japan and Korea are already doing.

“From small and beautiful to giant and magnificent”. These were the words of Kurdistan Regional Government (KRG) Natural Resources Minister Ashti Hawrami at a recent oil and gas conference in Erbil. Hawrami was referring to the contract ExxonMobil signed with Iraq’s semi-autonomous northern Kurdish region on October 18 to explore six blocks in the region. These blocks include Al Qush, Bashiqa, Betwata, Pirmam, Qura-Hanjeer, and a sixth block along the border with Iran near Penjwin. ExxonMobil’s daring move – sharply criticized by the central government in Baghdad, which is disputing the legality of the KRG’s oil and gas contracts – does not only provide an economic benefit for the region in terms of additional capital investment and industry expertise, it may also be seen as a vote of confidence in Iraqi Kurdistan. Despite the withdrawal of US troops from Iraq by the year’s end, it seems that ExxonMobil has deemed the Kurdish region to be safe and commercially attractive enough to invest in.

ExxonMobil – the largest (oil) company in the world by market value – has good reason to believe in Iraqi Kurdistan’s opportunities. There have only been two significant terrorist attacks in the region since 2004 (the last one was in 2008) and not a single coalition soldier has been killed nor a single foreigner kidnapped in the area it administers. What is more, Iraqi Kurdistan has undergone a remarkable economic transformation. GDP per capita has jumped from $375 in 2002 to $5500 in 2011, government revenues have increased from $100 million to $10 billion over the same time period, and the economy is projected to grow by 12 percent in 2012.

Top-10

One of the primary drivers of this rapid economic expansion has been the development of the oil and gas sector, facilitated largely by the legal framework for foreign investment established by the KRG. Unlike the central Iraqi government, which only offers energy companies technical service contracts, the KRG awards production sharing contracts (PSCs) which are much more attractive for oil companies. Since it first inked a deal with Turkey’s Genel Enerji in 2002 (the firm is set to merge with former BP CEO Tony Hayward’s company Vallares), the KRG has signed 45 PSCs with 29 mid-tier energy companies from 17 countries, despite objections from Baghdad. To date, these companies have drilled over forty exploration wells (there are currently fifteen exploration and development drilling rigs in operation in the region) and have made numerous oil and gas discoveries.

These activities have resulted in the discovery of around 5 billion barrels of oil in the Kurdish region today, bringing the total for Iraqi Kurdistan to an estimated 45 billion barrels of proven oil reserves. This means that if Iraqi Kurdistan were a country, it would be in the world top-10 in terms of oil reserves, on a par with Libya. Total Iraqi proven reserves are estimated at 110 billion barrels by the BP Statistical Review of Energy, the fourth largest in the world.

To put this in perspective, Iraqi Kurdistan’s oil reserves would place it on par with Libya, the world’s tenth largest reserve holder while its combined proven and prospective recoverable gas reserves surpass some of the leading piped-gas suppliers to the EU including Norway, Libya, Azerbaijan, the Netherlands, and the UK.

In terms of output, oil production has increased dramatically from a standing start in 2007 to some 200,000 barrels of oil per day (b/d) in 2011, of which 100,000 b/d were exported; the KRG plans to increase exports to 175,000 b/d in 2012. Within five years, the KRG aims to export 1 million barrels per day through the Kirkuk-Ceyhan pipeline to Turkey. Considering the low exploration and development costs ($2-3/barrel for exploration and $1/barrel for operation) and the proximity to large markets, the prospects for meeting this target are realistic.

Top priority

The development of the domestic natural gas market over the short to medium-term is a top priority for Iraqi Kurdistan because gas is seen as a major fuel source, with gas-to-power expected to lead the way. Proven reserves are estimated at 100-200 trillion cubic feet (tcf) or 2.8-5.6 billion cubic metres (bcm). This is more than countries like Norway, the Netherlands and Kazakhstan. Since commercial gas development is still in its initial stages, it is not clear yet how the region’s export will develop. For now, gas supplies have been allocated as follows: 4-5 tcf for existing power plants in the region, 10 tcf for six new power plants throughout broader Iraq, 5 tcf for industrial domestic use and 2 tcf for a new power plant in Turkey.

Currently, a consortium led by Crescent Petroleum based in Sharjah in the United Arab Emirates (Crescent 40%; Crescent’s sister company Dana Gas 40%; Hungary’s MOL 10%; Austria’s OMV 10%) operates the only commercial gas fields at Kormor and Chemchemal in the Kurdish region and produces 300 million cubic feet (mcf) a day. Substantial investments in gas production and processing facilities are helping to generate twenty-two hours of electricity daily for four million people in the region, up from just two hours a few years ago and compared to four hours of available power in the rest of Iraq.

In addition, according to the KRG Ministry of Natural Resources, the KRG is planning to gasify power stations at Dohuk, develop an additional 6000 MW of predominantly gas-fired power generation capacity, and supply the greater Iraqi market with electricity including the neighboring states of Kirkuk, Ninevah, and Salahudin (which is sure to foster improved relations between the Kurdish and Arab provinces). Besides helping to create a domestic gas market, promoting gas-to-power carries the added advantage of providing the highest economic value for power generation because it displaces oil, hence increasing the availability of crude supplies for exports.

In order to help boost production and meet domestic demand over the longer term, the KRG aims to implement measures to develop both associated and non-associated gas fields, secure long-term demand centers (which are necessary to facilitate large-scale investments in upstream projects) and avoid wasteful practices such as gas flaring. It thus expects gas output to satisfy the demand for electricity, industry (fertilizer, cement, steel, methanol, etc.) and houses (central heating, cooking gas) in the coming years.

Gas export potentials

The KRG Ministry of Natural Resources has stated that it intends to export natural gas once domestic demand is met, with Turkey being the first and most obvious export destination. Political relations between the KRG and Turkey have improved immensely over the past few years, and Turkey has increasingly been developing itself as a “good hegemon” for Iraqi Kurdistan. As a sign of improved relations, Turkish president Recep Tayyip Erdogan visited Erbil on March 29, 2011 to open the city’s new international airport together with Kurdish President Massoud Barzani. The KRG has actively sought a positive relationship to Ankara and does not support the PKK.

The Kurdish region’s gas fields are in close proximity to Turkey’s southeastern border and the existing infrastructure capacity there. Therefore, the gas fields are strategically placed to compete in the Turkish market with other major suppliers like Russia and Iran. Turkey imports over 98% of its natural gas and its demand has steadily increased from 0.4 billion cubic meters (bcm) annually in 1986 to 35 bcm in 2009. Russia provides approximately 52% of Turkish imports, Iran 16%, Azerbaijan 15%, Algeria 14% and Nigeria 3%, according to figures from the International Energy Agency (IEA). With strong economic growth being forecast and the planned construction of many new gas-fired power plants in the country, Turkey’s natural gas consumption is projected to nearly double to 61 bcm by 2020, thus strengthening the demand for Iraqi gas.

Piped gas to Europe via Turkey is also being considered as an export option for Iraqi Kurdistan. Demand for natural gas in Europe is expected to rise due to climate concerns and nuclear phase-outs in several countries including the EU’s second largest gas consumer Germany. Consequently, the Kurdish region’s considerable reserves can play an important role in the EU’s efforts to diversify gas supplies through a southern corridor in order to lessen its dependence on Russian exports. Gas deliveries from northwestern Iraq could potentially be transported via several prospective pipelines including Nabucco, the IGI Poseidon (also known as the Greece-Italy pipeline) or the more probable Trans-Adriatic Pipeline (TAP) and/or the recently proposed BP South-East Europe Pipeline.

Furthermore, the Ministry of Natural Resources has indicated that LNG exports may be a viable alternative and can potentially compete with pipeline exports given the current price levels and distance to market. At a workshop organized by the London-based EUCERS (European Centre for Energy and Resource Security) on June 16, 2011, Minister of Natural Resources Hawrami stated that the KRG intends to send its gas to international markets by sea rather than wait to pipe it to Europe should the construction of pipelines take too long to materialize. Such a scheme would envision transporting gas to an LNG terminal in Ceyhan in Turkey, which could then export it onward to Spain, France, the UK, or elsewhere.

Dire consequences

The realization of all these prospects could be greatly facilitated if the KRG and the central government were to resolve their protracted dispute over the absence of a revenue-sharing law and the draft hydrocarbon law of 2007. The passing of such legislation is essential, as it provides a firm legal basis for the allocation of oil and gas proceeds and a regulatory framework for contracts and investment.

Baghdad has thus far refused to recognize the legality of bilateral contracts signed between the KRG and investors and has a policy of blacklisting such companies from operating in the oil-rich south. Hence, ExxonMobil’s move into Iraqi Kurdistan could jeopardize its considerable upstream investments in southern Iraq, a region that is even richer in oil than the northern part. The company entered a twenty-year venture in 2009 to develop Phase I of the giant West Qurna oil field (ExxonMobil 60%; Shell 15%; Iraqi state company 25%). The consortium is now producing around 350,000 barrels per day out of a total of 8.5 billion barrels for just Phase I of this project. In addition, ExxonMobil is leading a major water injection project and has qualified for a fourth licensing round in 2012 to explore 12 more blocks in Iraq.

The federal Iraqi oil ministry has already sent out three letters to ExxonMobil to warn of “dire consequences”, which could result in a potential termination of its contract or an exclusion from future bidding rounds, if Exxon does not rescind its deal in Iraqi Kurdistan. This is what happened to US independent Hess, which had qualified to take part in Iraq’s fourth licensing round in 2012 but had its qualification revoked after entering into an agreement with the KRG in July 2011.

Despite these risks – and even some criticism from the US government – ExxonMobil has not budged yet. Indeed, its decision to enter a binding contract with the KRG may well indicate that it is confident that Erbil and Baghdad are making significant progress towards reaching an accord soon. There are several factors that underpin this argument.

Firstly, the KRG has agreed to use the 2007 draft hydrocarbon law as the basis for discussions on a federal law. It plans on working together with Iraqi Oil Minister Abdel Karim al-Luaibi to revise the law before submitting the amended draft to parliament by the year’s end. While there are no guarantees, signs of reaching a deal are more positive now than they have been for quite some time.

Secondly, given ExxonMobil’s substantial stakes in southern Iraq, it is doubtful that it would have chosen to put themat serious risk if it were not satisfied with the current pace of political developments.

Finally, several of the Kurdish blocks acquired are in disputed territory and may even overlap other provincial jurisdictions. Thus, it is highly improbable that the US major would first risk its assets in the south while investing in politically disputed territories that may potentially be a point of conflict in the future if it were not confident that a resolution will be reached.

Major player

All in all, it seems much more probable that ExxonMobil has recognized the positive outlook for regulatory reform and wants to be the first major player to gain a foothold in Iraqi Kurdistan. This will consequently provide the company with a competitive advantage vis-à-vis other major corporations like Shell, Chevron, and Eni (who are said to also have held talks with the KRG) that may potentially follow in Exxon’s footsteps should an agreement between Erbil and Baghdad be reached.

This does not mean that there are no risks. Some questions still need to be resolved, such as the issue of Kirkuk, which falls outside the KRG but is at the heart of Kurdistan. More generally, the Iraqi State as a whole remains volatile, limiting the Kurdish regional government’s freedom to act.

This makes it all the more important for the EU and European governments to wake up to the reality of developments in Iraqi Kurdistan. They should acknowledge the political and economic progress that has been made in the Kurdish region and understand that the KRG has far-reaching rights under the present constitution. The KRG is responsible for all the internal affairs of the region and may pass its own laws as long as they are not in violation of the Constitution.

European energy companies also have a much too limited presence in the region. Many large companies specifically prohibit their employees from travelling to the Kurdish region because of the perceived risks and because they are unwilling to bear the costs of guards and escorts, which, however, are unnecessary. As a result, many Middle Eastern, Asian and Turkish companies are taking up an ever larger market share. Now even ExxonMobil got ahead of its European rivals.

 

Please click here for the online version of this article on www.europeanenergyreview.eu

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EPP Group – Building European Energy Diplomacy with a contribution by Frank Umbach

10. November 2011 By

Please find the report on the 10. Novermber 2011 hearing in the European Parliament, with a contribution by Dr Frank Umbach, Associate Director EUCERS, here!

Filed Under: EUCERS NEWS

Azerbaijani-Turkish agreement offers new opportunities for Azerbaijan in Europe’s downstream sector

3. November 2011 By

Interview with EUCERS Associate Director Frank Umbach, published in TREND on 3rd November 2011

The transit agreement between Azerbaijan and Turkey offers concrete perspectives for a European gas route and new business opportunities for Azerbaijan in Europe’s downstream sector, Frank Umbach, Head of the Programme “International Energy Security” at the Centre for European Security Strategies, Munich-Berlin & Associate Director at the European Centre for Energy and Resource Security (EUCERS), King’s College, London, said.

“For Azerbaijan it offers another strategic export route not just for the Shah Deniz-II gas fields, but also for the new ones such as Absheron, Azeri-Chirag-Guneshli and Umid,” Umbach told Trend on Tuesday.

In late October, Azerbaijan and Turkey signed a package of gas contracts which includes cost issues of Azerbaijani gas for Turkey in the Shah Deniz-2 project, volume of gas supplies to Turkey from the field after 2017, as well as a transit agreement for Azerbaijani gas transportation through Turkey.

The bilateral gas agreement with Azerbaijan is Turkey’s fundamental strategic interest. It also serves its ambitious foreign policy and geopolitical interests, Umbach said.

“Turkey will become a major transition country and gas hub for Europe and the Caspian region. Furthermore, Turkey has only small gas reserves and own production,” he said.

click here for the article on www.trend.az

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