Dear Ministers,
Excellencies,
It is a great honour to be with you today in Odessa at the
occasion of this
conference on energy cooperation in the Black Sea region.
The European Union, its Member States and companies have a
long-standing
record of cooperation on energy in the Black Sea region and
with its coastal States.
The accession of Romania and Bulgaria to the European Union
in 2007 was a major
development for the EU perspective on the Black Sea.
In its Communication on the Black Sea Synergy (April 2007),
the European
Commission pointed out that "the Black Sea region is a
production and transmission
area of strategic importance for EU energy supply security. It
offers significant
potential for energy supply diversification and it is
therefore an important component
of the EU’s external energy strategy."
This strategic importance is reflected by the comprehensive
and combined initiatives
and cooperation policies established through INOGATE, the
Baku process, the
Eastern Partnership and, of course, our energy cooperation
with each of the
countries in the region. This will be my starting point.
I – Building strong energy partnerships around the Black Sea
The European Union energy policy for the Black Sea region is
built on a strong and
balanced partnership with each of the countries represented
today.
Allow me to first mention Ukraine. Ukraine has a strategic
asset - its extensive
existing gas transportation network. The country is at a
cross-road where it has a
unique opportunity to ensure that it continues to make
commercial sense for the gas
market players to use the Ukrainian gas transportation
network as one of the
preferred routes for Russian gas supplies to the EU. The
modern gas transit
business requires transparent, efficient and quality transit
services through a
modernised gas transportation network.
I wish the European view to be well understood. We consider
that the reform of the
Ukrainian gas domestic market and gas transit are not
separate issues. Transit will
not be totally guaranteed as long as the domestic gas system
in Ukraine is not
financially sustainable and transparent.
This is why we are now looking at the reforms in Ukraine
with great attention. The
recently adopted gas law is a positive starting point. It
should be followed by
effective reforms, including the implementation of new
legislation on public
procurement and independent energy sector regulation which
will be conducive
towards creating an efficient, transparent and well managed
energy sector able to
attract domestic and foreign investments as well as lending
from IFIs in view of the
modernisation of Ukraine's natural gas transit system..
Such reforms would also ensure Ukraine can take maximum
advantage of another
strategic asset – its under-exploited own energy resources. The
European Union is
helping as much as possible in this process by sharing our
experience on energy
sector reforms and through our joint project for the
modernisation of the Ukrainian
gas transit system.
Let me now cross the Black Sea to the shores of Turkey. Turkey
is developing a
modern and very dynamic energy market. Turkey is a strong
partner of the
European Union and we believe that the security of energy
supply for Turkey and for
the European Union is strongly interrelated. As a result, we
have developed several
projects of regional dimension. I will highlight in a few
minutes the progress
achieved on the "Southern corridor" for which
Turkey is playing a pivotal role.
The importance of Russia as a key player in the Black Sea
region is evident. The
European Union and Russia will celebrate this year the 10th anniversary
of their
energy dialogue. We regard this dialogue as essential for
our energy policy. The
European Union and Russia are interdependent, the EU being
by far the first
importer of Russian hydrocarbons: this is not expected to
change in the future. For
these reasons, we believe that Russia has an important
contribution to make to
multilateral energy organisations such as the Energy
Charter. At the same time, we
expect our Russian partners to understand our security of
supply policy based on
diversification of supply routes and sources.
Georgia has started an impressive investment programme to
develop its hydrogeneration
capacities and its electricity interconnections with
neighbour countries, in
particular with Turkey. The European Union and the European
Banks (EIB, EBRD,
KfW) are involved in the financing of these projects. The
Georgian energy sector is
largely privatized already. It is undergoing important reforms.
Georgia is today
observer to the Energy Community and we would welcome its
application for full
membership.
The picture is not complete without Azerbaijan. While not
physically on the Black
Sea, Azerbaijan is a major energy player in the region and a
key partner for the
European Union. I was pleased to meet President Aliyev in
Baku in April. I can
confirm that our co-operation is built on solid foundations,
underpinned by clear
mutual interests. The participation of Azerbaijan in the
Eastern Partnership is a
historic milestone and by signing the Southern Corridor
Declaration in Prague,
Azerbaijan has confirmed its critical role and commitment to
building bridges to the
EU. We are following closely the award of gas from Shah
Deniz-2. The
Commission has long underlined its interest in a strategic
allocation of gas from
Shah Deniz-II that allows the Southern Gas Route to develop.
I will come back to
this later.
Let me also mention that, in order to enhance political
cooperation and move
forward on gradual economic integration with the EU, we have
launched earlier this
month bilateral negotiations with Armenia, Georgia and
Azerbaijan in view of
concluding Association Agreements which will bring the
Southern Caucasus region
closer to the EU
II – Promoting common rules favourable to energy investment
and trade
Energy trade and investments in the Black Sea region are
gaining importance. New
gas and electricity interconnection are built. New power
plants are being developed,
both as regards fossil fuel generation, renewable energies
and nuclear projects.
We believe that trade and investments in the energy sector
are best supported by
multilateral frameworks ensuring transparent market rules,
protection of investments
and predictability and fair conditions for transit and trade
of energy.
Today, five Black Sea coastal states are Members of the
World Trade Organization.
The same five coastal States also signed and ratified the
Energy Charter Treaty1.
Both as regards the World Trade Organisation and the Energy
Charter Treaty, a
dialogue is on-going with Russia and we hope that Russia
will be able to join the
common platform soon.
We believe that the Energy Charter Treaty continues to
constitute a useful
instrument to facilitate energy investment and trade.
1 All but Russia.
In addition, several States have decided to integrate their
energy market on the
basis of the EU legislation. Next to Bulgaria and Romania
who have joined the
European Union three years ago, other countries have decided
to engage in the
Energy Community process.
The Energy Community Treaty provides for full market
integration with the European
Union on the basis of EU energy and environment legislation.
Moldova recently
joined. Ukraine is about to join soon and will have to put
in place the required
legislative and regulatory framework. Other countries are
interested. Negotiations
have been opened with Turkey. Georgia has been accepted as
an observer and
could apply for membership.
Turkey is in a specific situation since it is at the same
time engaged in the EU
accession process and in the Energy Community process. In
both cases, the
perspectives of market integration and the reference
regulatory framework are the
same. Let me also mention here that in the case of Turkey,
the synchronous
interconnection of the electricity system with the EU, which
is likely to be finalised
next year, will represent an important step towards market
integration. In any case, it
is worth mentioning that many aspects of the energy market
regulation in Turkey are
already close to the European Union regulations and that the
Intergovernmental
Agreement on Nabucco signed last year is fully in line with
the EU legislation.
Ladies and Gentlemen,
We aim at strengthening multilateral energy cooperation in
the Black Sea region and
we consider that a multi-dimensional approach is needed. The
WTO and Energy
Charter Treaty provide for the key principles. For those
partner countries wishing so,
the Energy Community Treaty is the main tool for further
market and regulatory
integration with the European Union.
These multilateral frameworks are not static. They need to
keep pace with the
evolutions in the energy sector. This is particularly
important for the Energy Charter
process which is entering a phase of review and
modernisation.
III – Promoting projects of common interest
Finally, let me shed light on two projects which the EU is
supporting and which
constitute good examples of regional integration.
Let me first mention the modernisation of the Ukrainian gas
network.
In March 2009 the Commission jointly hosted with Ukraine a
high level conference
on the modernisation of the Ukrainian Gas Transit System
which involved the
European Investment Bank, the European Bank for
Reconstruction and
Development and the World Bank. The resulting Joint
Declaration committed
Ukraine to undertake the necessary reforms that would permit
the international
financial institutions and other lenders to invest in the modernisation
of the Ukrainian
gas transit network. It also demonstrated the commitment of
the EU to the
modernization of Ukraine’s gas transit system.
Since then, Ukraine has begun the difficult process of
reforming of its gas sector
while in parallel the International Financial Institutions
are undertaking their due
diligence procedures. The EU is assisting by financing,
through the Neighbourhood
Investment Fund, the necessary technical feasibility study
and environmental impact
assessments that are required by the banks. We are expecting
concrete projects to
be implemented by early next year.
Southern corridor
The European Commission is aware that sometimes
extraordinary measures are
needed. For example, in gas markets, an extraordinary effort
is needed to open the
Southern Gas Corridor.
When this project started, there was feedback from the
industry saying that the
development of the Southern Gas Corridor was desirable, but
that no institution, the
European Union included, had the muscle to open the
Corridor.
Put simply, the number and the complexity of problems was
simply too great, and a
list of bilateral relationships and issues that need to be
considered proved the point.
However, the European Commission is showing that a way can
be navigated
through this tangle of countries and we actually are in the
course of doing so.
However, I am well aware that this is a delicate navigation,
and that the success
does not only depend on us. We may need extraordinary
measures to achieve
success, such as the Caspian Development Corporation or the
building of a trans-
Caspian pipeline link. These measures will capture the
public goods associated with
diversification of supply and give confidence to new
suppliers to move ahead in
forging relationships with us.
I want to say a few words about Nabucco. Nabucco delivers
some of the strategic
benefits that public policy demands. First of all, it
tackles a public interest: the
interest in energy security. In this regard, the gas markets
isolation of the Central
and Southern EU Member States is a concern to the
Commission.
Secondly, the project should enhance wholesale competition;
a project that takes
gas directly from the ground and sticks it in a gas turbine
does not deliver on this.
Third, it should be clear what is the transit regime in
transit states: either there is a
project which establishes a physical connection itself or
clear transit rights are
foreseen. Securing oil transportation
The Black Sea region is strategic for the export of oil from
Russia and the Caspian
region. We expect that in future additional quantities of
crude oil will likely be
imported into the EU through existing or new pipelines
and/or via tankers. The
congested Turkish straights will not be able to transit
additional oil quantities and
this situation raises concerns both in terms of security of
supply and with regard to
the environmental threat of possible tanker accidents in our
seas. I have to say that
we fully share the Turkish concerns in this respect.
The Samsun-Ceyhan oil pipeline project will provide part of
the answer. We regard
this project positively: it is a successful example of
cooperation between Turkish,
European and Russian companies. I believe that other
projects will also be needed
to further alleviate the pressure on the Turkish Straits and
reduce environmental
risks in the Black Sea and the Mediterranean Sea. I suggest
an initiative involving all
stakeholders around the Black Sea to discuss these issues.
Conclusion
Dear Ministers,
Ladies and gentlemen,
Let me summarize how I see the EU energy priorities in the
Black Sea area.
First, we will develop the Southern corridor in a manner
that will balance the
interests of the producing countries, of the transit
countries and of the consumer
countries, bearing in mind that several countries, like
Turkey, are at the same time a
consumer country and a transit country. I wish to underline
that in our analysis, it is
not possible to ensure our own security of supply if the
security of supply of our
partners is not guaranteed as well. We are confident that in
the coming months
important steps will be taken towards the investment
decision on Nabucco.
Second, we will pursue market integration with those countries
wishing to do so, in
the framework provided by the Energy Community Treaty. The
accession of Ukraine
will be a major event in the coming months. We will continue
to accompany and
support Ukraine along the road of reforms.
Third, we wish to promote regional solutions to regional
problems such as the oil
export routes and the preservation of the maritime
environment in the Black Sea and
the Mediterranean Sea. This is why we would support regional
initiatives in this
direction.
Thank you for your attention.