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EU interests in the Caspian Sea EU interests in the Caspian Sea Region including FDI and TradeRegion including FDI and Trade
Yelena KalyuzhnovaYelena Kalyuzhnova Director, TheDirector, The Centre for Euro-Asian Studies, Centre for Euro-Asian Studies,
The University of Reading, UK The University of Reading, UK
ECE/UNECE/UN Workshop Workshop “Trade, business and investment“Trade, business and investment
in a wider Europe”in a wider Europe”
7 April 20037 April 2003, , GenevaGeneva
ContentsContents
European Union: Dependence on Imports
Physical Infrastructure of the Caspian hysical Infrastructure of the Caspian
Region Region
EEuropean Investment in the Caspian uropean Investment in the Caspian
Energy Energy
EEU-Caspian Trade: The Example of GasTrade: The Example of GasEEU Energy Charter TreatyU Energy Charter Treaty
UPSTREAM PRESENCE
European energy companies involved in E&P in the Caspian
Source: Centre for Global Energy Studies, London
Transit RoutesTransit Routes
FragileFragile
Security remains a substantial problem Security remains a substantial problem
Finding alternate land-sea routes is a Finding alternate land-sea routes is a
difficult venturedifficult venture
CCaspian Regionaspian Region – Oil Pipelines – Oil Pipelines
Inflows of FDI in Caspian Region Inflows of FDI in Caspian Region Economies,1993-2001, mln. US $Economies,1993-2001, mln. US $
Source: UN/ECE Common Database, derived from national and CIS statistics.
-1000
0
1000
2000
3000
4000
5000
6000
1993 1994 1995 1996 1997 1998 1999 2000 2001
mln
. U
S$
Russia Azerbaijan Turkmenistan
Uzbekistan Kazakhstan
Structure of FDI in 2001, %Structure of FDI in 2001, %
0.22.6
40
7.15.3 6.8
1.70.8
11.68.7
4.4
10.8
0
5
10
15
20
25
30
35
40Ag
ricult
ureFo
od pr
ocess
ingOi
l & G
asex
tracti
onPip
eline
sTe
chnic
al ac
tivitie
sM
etallu
rgyTe
lecom
munic
ation
Cons
tructi
onM
oneta
ryint
ermed
iation Tr
ade
Healt
h, Ed
ucati
onan
d Pub
licOt
her
Kazakhstan
Source: Azerbaijan in XX Century, State Statistical Committee of Azerbaijan Republic. Baku, Statistical Yearbook of Kazakhstan, 2002 ; The Centre for Euro-Asian Studies.
0.87.4
66.1
8.0
14.6
2.5 0.4
0
10
20
30
40
50
60
70
Agric
ultur
e
Food
Pro
cess
ing
Oil &
Gas
Extr
actio
n
Manu
factur
ing
P&D
of Ele
ctrici
ty
Wate
r Pur
ificati
on &
Distr
ibutio
n
Cons
tructi
on
Azerbaijan
EBRDEBRD has interests in 13 energy-sector has interests in 13 energy-sector projects and an exposure of €650 mnprojects and an exposure of €650 mn
Source: EBRD database.
0
1
2
3
4
5
6
Azerbaijan Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan
0
50
100
150
200
250
300
Number of projects
Value of projects (€ mn)
€ mn
Principal Exports in Caspian Region Principal Exports in Caspian Region
EconomiesEconomies, , 20012001Kazakhstan
Chemicals5%
Other13%
Mineral products
58%
Ferrous metals24%
Tajikistan
Electricity12%
Cotton fibre11%
Other18%
Aluminium59%
Uzbekistan
Energy products
23%
Gold10%
Cotton41%
Other26%
Kyrgyzstan
Electricity16%
Other27%
Machinery11% Non-
ferrous metallurgy
46%
Turkmenistan
Textiles2%
Other15%
Oil&Gas80%
Cotton3%
AzerbaijanFood
Industry2%
Oil products
92%
Other6%
EUROPE’S GAS IMPORTSEUROPE’S GAS IMPORTS
Source: Centre for Global Energy Studies, London
EU ENERGY CHARTEREU ENERGY CHARTER
• Investment Provisions
• Transit Protocol
EUROPE IS THE NATURAL MARKET EUROPE IS THE NATURAL MARKET FOR CASPIAN OIL AND GASFOR CASPIAN OIL AND GAS
Source: Centre for Global Energy Studies, London
ConclusionConclusion The forthcoming EU enlargement will change the
energy landscape of the European continent and will have a significant implications for EU energy markets.
The opening of new EU gas and power markets to the east will produce main challenges as well as wide opportunities for investment and trade.
European energy interests in the Caspian region include: the involvement of European energy companies in the region and a growing interest in the Caspian region as a current and future source of energy for use in Europe itself.