EURO416 EURO416

The EU/ Russian relationship The EU/ Russian relationship within the energy debate- Russian within the energy debate- Russian

Oil & Gas supply to the EU.Oil & Gas supply to the EU.

The EU / Russian Energy Dialogue.

Important because both parties are bilaterally dependent. EU for resources, and Russia for the market, investment and technology.

The guidelines for this were laid down in two 2001 summits, these being: promotion of land transport via pipelines & rail, creation of a pan-European gas & electricity market, support for reforms in the Russian energy sector, &

cooperation on energy efficiency & technology transfer

The EU’s energy consumption.

The EU currently imports 50% of it’s energy. This will rise to 70% in the next 20 years.

As Russia is the second largest supplier of oil and is the largest supplier of Gas in the world it is a critical partner of the EU concerning energy supply.

The EU’s Energy Policy

Main Goals: Sustainability, Security & Competitiveness.

•Diversification of the Energy sector.• Energy efficiency and increased security of supply, while keeping

within the Kyoto Protocol.•Recognition of Russia as an “equal” partner as there is a bilateral

dependency.

Russia’s need for investments and its objectives

Present Situation

Infrastructure is dilapidated with

a high level of foreign debt.

Lack of competitiveness.

Foreign Direct investment incredibly low at 2.5% of investment.

Objectives:

To double its GDP and reach its forecasted growth rate of 5-6% between 2003-

10.

To keep state control over energy resources while

attracting foreign investment.

Geopolitics: The Baltic example.

The construction of the Primorsk bypassing the Baltic in order to

have a direct sea connection and importantly so as not to pay

the transit transport tariffs.

The switching off of pipeline supply via the Baltic despite continuing

halts in production and transport.

Putins view: “the more Russian hands and feet are tied by transit countries, the more they have a temptation to be

parasites on Russia”

The Paradox: Russia charges other nations such as

Kazakhstan and Turkmenistan transit transport tariffs for use

of its network.

Map of the Baltic Ports

Map of existing and proposed Oil & Gas pipelines to the EU

The Future.

In the long term the EU will be less dependent on Oil & Gas. This will come as a result of their own push to

diversify energy resources and with the gradual depletion of Russian reserves.

The present future is good for both the EU & Russia as they have a good relationship & understanding & importantly

they need each other.

The energy dialogue will probably have positive outcomes on the FSU’s, as the EU & Russia work through the various

issues.