Download EU Interests in the Caspian Sea Region Including FDI and

EU Interests in the Caspian Sea Region Including FDI and Trade
Yelena Kalyuzhnova, The Centre for Euro-Asian Studies, The University of Reading,
UK.
The arrival of the 10 new members acceding to the EU, in 2004, will change the
energy landscape of the European continent. This change no doubt will have
significant implications for EU energy markets and will provide investment
opportunities to the EU energy system. The EU is already the largest energy importer
in the world and the second-largest consumer. According to EU data, its dependence
could reach 70% of import supplies by 2030. By that time oil imports could account
for 90%, gas consumption – 70% and coal imports for up to 100%. Without doubt the
forthcoming enlargement will reinforce the above-described trends, despite the fact
that some candidates countries are producers of some primary energy products. The
opening of new EU gas and power markets to the east will produce major challenges,
despite quite wide opportunities in regards to the investment and trade.
In this respect European energy interests in the Caspian region are particularly
distinguished. Firstly, there is the involvement of European energy companies in the
region, with European companies involved in all spheres of energy in Caspian region
– oil, gas, coal, electricity – but particularly in the upstream sector of the oil and gas
industries. Secondly, Europe has a growing interest in the Caspian region as a current
and future source of energy for use in Europe itself. The region’s oil is already
exported to Europe and there are many plans for gas to follow, with pipelines being
proposed to carry the Caspian Region’s gas to the heart of the European market. The
European Union’s Energy Charter, which seeks to address each of the two areas, is
just one of a series of initiatives aimed at helping to unlock the entire Caspian
region’s energy resources.
Geographically and politically, Europe remains the most natural market for the
Caspian energy. This is indicated by the fact the obvious export routes lie to the north
and west, into Europe, and the European Union, which has itself become concerned
about the future security of the region’s energy supplies.