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CaucasCaucasiian Energy Securan Energy Securiity ty & & TurkeyTurkey
Necdet PAMİRNecdet PAMİRBoard Member, World Energy Council Turkish National Board Member, World Energy Council Turkish National
CommitteeCommittee26-27 June 2009, İstanbul26-27 June 2009, İstanbul
The geopolitics of Energy The geopolitics of Energy in the contexts of Caucasus and in the contexts of Caucasus and
Caspian basin: Caspian basin:
IInternal and international implicationsnternal and international implications
World Primary Energy ConsumptionWorld Primary Energy Consumption
by Sourcesby Sources (%), (%), endend 2008
Coal 29.3 %
Oil34.8 %
Gas 24.1 %
Hydro, other
renewables 6.4 %
Nuclear5.4 %
Source: BP Statistical World Review of Energy, June 2009
World Primary Energy ConsumptionWorld Primary Energy Consumption(Ref. Sen.)(Ref. Sen.)((by Sourcesby Sources (%), million tons oil equivalent (%), million tons oil equivalent))
Petrol
Kömür
Gaz
Biyokütle
NükleerHidro
Diğer Yenilenebilirler
Kaynak: WEO 2008, IEA
Between 2006 and 2030, energy consumption will increase by 45%(yearly increase: 1.6 %); less than 2007 forecast by 0.2 %
% 26
% 29% 34
% 30
% 22
% 6% 5
% 9.8% 10.1
% 20.5
% 2.2% 2.4
% 2.1
World Recoverable Reserves, end 2008World Recoverable Reserves, end 2008
Africa125.6 billion
barrels
South, Central America
123.2 billion barrels
Asya Pasifik42 billion barrels
N. America 70.9 billion barrels 18.4 billion bbl
FSU127.8 billion
barrels
Reserve/Production: 42 years
EU6.3 billion
barrels
M. East754 billion barrels
Source: BP Statistical Review of World Energy, June 2009
End 2005
Canada oil sands:151 billion bbls
% 60
Recoverable Gas ReservesRecoverable Gas Reserves (end 2008)(end 2008)
Reserve/Production: 60,4 years
7.31
8.87EU
2.87
75.91
% 41.0
14.6615.39
57.0
% 30.8
Source: BP
Source: BP Statistical Review of World Energy, June 2009
N. Caucasus and oilN. Caucasus and oil North Caucasus North Caucasus geographygeography is within the is within the
boundaries of the Russian Federation. boundaries of the Russian Federation. – Dagestan, Ingushetia, Chechnya, N. Osetia, Dagestan, Ingushetia, Chechnya, N. Osetia,
Kabardyn-Balkar, Karatai-Circassia & Adıgey Kabardyn-Balkar, Karatai-Circassia & Adıgey Autonomous Republics, Rostov region, Autonomous Republics, Rostov region, Krasnodar and Stavropol provincesKrasnodar and Stavropol provinces
Chechnya Chechnya is an important oil region both is an important oil region both for its oil production and as a transit point for its oil production and as a transit point on the Baku – Novorossisk oil pipeline on the Baku – Novorossisk oil pipeline
DagestanDagestan is also a transit point on the is also a transit point on the Baku - Dagestan - Novorossisk pipelineBaku - Dagestan - Novorossisk pipeline
““Caucasia”Caucasia” in the EIA website in the EIA website
In this website, when you In this website, when you look for look for CaucasiaCaucasia, you end , you end up with three countries: up with three countries: Azerbaijan, Georgia and Azerbaijan, Georgia and Armenia; which is: Armenia; which is: South CaucasusSouth Caucasus
http://www.eia.doe.govhttp://www.eia.doe.gov
(South) Caucasus & Energy(South) Caucasus & Energy
Azerbaijan:Azerbaijan: the most important the most important country with its rich oil and gas country with its rich oil and gas reserves. In addition, a transit country reserves. In addition, a transit country for the C. Asian oil and gas pipelines.for the C. Asian oil and gas pipelines.
Georgia:Georgia: Transit country. Potential oil Transit country. Potential oil and gas reserves, mainly in the B. Sea and gas reserves, mainly in the B. Sea off-shore off-shore
Armenia:Armenia: No proven reserves. Not a No proven reserves. Not a transit country. Has potential as a transit country. Has potential as a transit countrytransit country
G. Kafkasya Hidrokarbon G. Kafkasya Hidrokarbon RezervleriRezervleri(BP, 2007 sonu)(BP, 2007 sonu)
AzerbaycanAzerbaycan– Petrol rezervi: 7 milyar varilPetrol rezervi: 7 milyar varil– Gaz rezervi: 1.28 trilyon metre küp Gaz rezervi: 1.28 trilyon metre küp
Gürcistan:Gürcistan:– Petrol rezervi: 300 milyon varil Petrol rezervi: 300 milyon varil (ABD Enerji Bakanlığı)(ABD Enerji Bakanlığı) – Gaz rezervi: (Tüketimde gazın payı: % 24; elektrik Gaz rezervi: (Tüketimde gazın payı: % 24; elektrik
tüketiminin % 80’i hidroelektrik, gaz tüketiminin tüketiminin % 80’i hidroelektrik, gaz tüketiminin tamamı Rusya’dan ithalatla)tamamı Rusya’dan ithalatla)
Ermenistan:Ermenistan:– Petrol ve Gaz rezervi: -Petrol ve Gaz rezervi: -– Enerji tüketiminin yarısı doğal gaz. Tamamına yakını Enerji tüketiminin yarısı doğal gaz. Tamamına yakını
Rusya’dan. ERusya’dan. Elektrik üretiminin % 30’u nükleer, % lektrik üretiminin % 30’u nükleer, % 30’u da hidroelektrik kaynaklardan30’u da hidroelektrik kaynaklardan
The newly inaugurated Armenian-Iranian gas pipeline has boosted bilateral cooperation
RFERL, April 15, 2009
Azerbaijan and EnergyAzerbaijan and Energy
Azerbaijan: Oil and Gas Azerbaijan: Oil and Gas ReservesReserves
(end of 2008)(end of 2008)
Rec. Oil reserves: 7 billion barrels (0.6 %)Rec. Oil reserves: 7 billion barrels (0.6 %) Rec. Gas reserves: 1.2 trillion m3 (0.6 %)Rec. Gas reserves: 1.2 trillion m3 (0.6 %)
Source: BP Statistical World Review of Energy, June 2009
Azerbaijan Oil Data Azerbaijan Oil Data (1000 barrels)(1000 barrels) 20082008
Total Oil productionTotal Oil production 875 875
Oil consumptionOil consumption 126 126
Oil exportsOil exports 749 749
Refining capacityRefining capacity 399 399
Proven reserves Proven reserves (billion (billion barrels)barrels)
77
Azerbaijan Oil Production, Consumption, Azerbaijan Oil Production, Consumption, ExportsExports
Th
ou
san
d b
arr
els
per
day
Major Projects, AzerbaijanMajor Projects, Azerbaijan
Caucasus and EnergyCaucasus and Energy At the very outset, the region offers At the very outset, the region offers
means of diversification and has a means of diversification and has a strategic importancestrategic importance
Sovyetler döneminde, petrol ve doğal Sovyetler döneminde, petrol ve doğal gazın tüm ihraç yolları, münhasıran gazın tüm ihraç yolları, münhasıran Rusya Federasyonu topraklarından Rusya Federasyonu topraklarından geçecek biçimde oluşturulmuştu (Boru geçecek biçimde oluşturulmuştu (Boru hatları, Volga Don Kanalı, demiryolları)hatları, Volga Don Kanalı, demiryolları)
Bu tekelin devamı, Sovyetler’in Bu tekelin devamı, Sovyetler’in dağılmasından sonra bağımsızlığını ilan dağılmasından sonra bağımsızlığını ilan eden devletlerin ekonomik ve eden devletlerin ekonomik ve dolayısıyla siyasi bağımsızlıklarına engeldolayısıyla siyasi bağımsızlıklarına engel
EnerEnergygy is the essential input of the is the essential input of the
economic and social economic and social development for every country. development for every country.
Energy security is an integral part Energy security is an integral part of both the economic security of both the economic security
and national security.and national security.
Energy security Energy security needs needs multidimensional multidimensional approach and approach and
international cooperationinternational cooperation……
Energy security does not stop at national borders Energy security does not stop at national borders and goes all the way to the final consumer and goes all the way to the final consumer (from the (from the suppliersupplier, through , through transiter(s)transiter(s) to the to the consumerconsumer))
The external (geopolitics), internal (operations and The external (geopolitics), internal (operations and investment) and temporal (short and long term) investment) and temporal (short and long term) components of energy security calls for a components of energy security calls for a multidimensional (and international) multidimensional (and international) policy approach policy approach to protect against energy system disruptionsto protect against energy system disruptions
EIA, “Energy Security”
Turkey-Azerbaijan Turkey-Azerbaijan (Georgia)(Georgia)
Joint ProjectsJoint Projects
Turkey-Azerbaijan Joint ProjectsTurkey-Azerbaijan Joint Projects
Exploration and Development ProjectsExploration and Development Projects– Azeri-Chiraq-Guneshli (Oil)Azeri-Chiraq-Guneshli (Oil)– ShahDeniz (Gas and condensate)ShahDeniz (Gas and condensate)– KurdashiKurdashi– AlovAlov
PipelinesPipelines– Baku – Tblisi – Ceyhan (Oil)Baku – Tblisi – Ceyhan (Oil)– South Caucasus Gas Pipeline/Turkey-Greece-Italy South Caucasus Gas Pipeline/Turkey-Greece-Italy
InterconnectorInterconnector– Proposed Pipelines Proposed Pipelines
(Turkmen gas, Kazakh oil and gas)(Turkmen gas, Kazakh oil and gas) NABUCCONABUCCO
Azeri – Chiraq – Güneshli Fields Azeri – Chiraq – Güneshli Fields
Source Field for BTCSource Field for BTC Source: The Implications of BTC; Thomas J Dimitroff, 14 April 2003
TPAO
Azerbaycan Projeleri
ŞAH DENIZ
ACGACG
ALOVALOV
KÜRDAŞI
BP15%
Statoil15%
SOA40%
ExxonMobil15%
AEC5%
ALOV
Agip25%
SOA50%
Repsol5%
Mitsui15%
KÜRDAŞI
TPAO5%
TPAO10%
ACG
Lukoil10.00%
SOCAR10.00%
Delta Hess2.72%
Pennzoil5.63%
Statoil8.56%
ExxonMobil8.00%
bp34.14%
Unocal10.28%
TPAO6.75%
Itochu3.92%
bp25.5%
Statoil25.5%
TotalFinaElf10%
Lukagip10%
OIEC10%
TPAO9%
ŞAH DENİZ
SCA10%
Tahmini Rezerv : 490 Milyar M3 Doğal Gaz
700 Milyon varil kondensat
Tahmini Üretilebilir Rezerv :5,4 Milyar varil petrol
TTÜÜRKRKİİYE YE PETROLLERPETROLLERİİ
1774 kilometers1074 km in Turkey
BTC
Baku - Novorossisk
Baku-Tblisi-Ceyhan Baku-Tblisi-Ceyhan Crude Oil Pipeline ProjectCrude Oil Pipeline Project
Max. capacity: 50 mt/year (1 million Max. capacity: 50 mt/year (1 million barrels/day)barrels/day)
Planned capacity: 1.2 million barrels/dayPlanned capacity: 1.2 million barrels/day Total length: 1774 kmTotal length: 1774 km
– Azerbaijan section: 440 kmAzerbaijan section: 440 km– Georgian section: 260 kmGeorgian section: 260 km– Turkey: 1074 kmTurkey: 1074 km– Pipe diameter: 42-34 inchPipe diameter: 42-34 inch– Total Pump Stations: 10 (Turkey: 4)Total Pump Stations: 10 (Turkey: 4)
Some Advantages of the BTC Some Advantages of the BTC ProjectProject
Major step for the realisation of the “East West Energy Major step for the realisation of the “East West Energy Corridor” thus increasing the strategic importance of Corridor” thus increasing the strategic importance of Azerbaijan, Georgia and Turkey Azerbaijan, Georgia and Turkey
Investments, economic benefits, employement for these 3 Investments, economic benefits, employement for these 3 countriescountries
Increasing the importance of Turkey for the EUIncreasing the importance of Turkey for the EU Increasing the importance and the potential of Ceyhan Increasing the importance and the potential of Ceyhan
terminal to become a “hub” terminal to become a “hub” Decreasing the oil tanker transportation through the Decreasing the oil tanker transportation through the
Turkish StraitsTurkish Straits Regional cooperationRegional cooperation Insreasing the potential of the “East – West Corridor” with Insreasing the potential of the “East – West Corridor” with
complementary projects (Kazakh oil and gas, Turkmen complementary projects (Kazakh oil and gas, Turkmen gas, etc..)gas, etc..)
ShahDeniz & S.Caucasus Gas PL ShahDeniz & S.Caucasus Gas PL ProjectsProjects
Capacity: 8.1 milyar metre küpTurkey 6.6 bcm Max. capacity: 23.5 bcmPhase: 8.5, Ph-2: 15 bcm
625 billion cubic meters gas (+)750 million barrels condensate
S. Caucasus Gas PLS. Caucasus Gas PL
http://www.eia.doe.gov/emeu/cabs/Azerbaijan/images/GastoEurope_2007.pdf
Operational since July 2007
Türkiye – Yunanistan Gaz Boru HattıTürkiye – Yunanistan Gaz Boru Hattı
0.75 + 3.6 bcm
Azerbaycan Gazı Türkiye üzerinden Yunanistan’a
Turkey: Energy Consumption Turkey: Energy Consumption (2007)(2007)
Oil 31%Wood
5%
Coal 29%
Hydro&
Renewables4%
Gas 31%
Source: World Energy Council Turkish N. C. 2007-2008 Turkey Energy Report
Turkey: Primary Energy Balance and Turkey: Primary Energy Balance and Forecast Forecast
(million tonnes oil equivalent)(million tonnes oil equivalent)
20062006 20102010 20202020
Energy Energy DemandDemand
99.899.8 126126 222222
Indegenous Indegenous ProductionProduction
26.826.8 37.5 37.5 6666
Energy Self Energy Self SufficiencySufficiency
27 %27 % 29 %29 % 30 %30 %
Source: Ministry of Energy and Mineral Resources, Turkey
Crude Oil Imports by Refineries Crude Oil Imports by Refineries (2008)(2008) (EMRA) (EMRA)
CountryCountry Amount (1000 Tons)Amount (1000 Tons) (%)(%)
IranIran 7.8007.800 3636
Russian FederationRussian Federation 7.1377.137 3333
S. ArabiaS. Arabia 3.0733.073 1414
IraqIraq 1.8741.874 99
KazakhstanKazakhstan 636636 33
SyriaSyria 515515 22
ItalyItaly 447447 22
U.K.U.K. 184184 11
AzerbaijanAzerbaijan 7777 < 1< 1
LibyaLibya -- --
TOTALTOTAL 21.74321.743 100100
Turkey: Oil and Gas Import BillTurkey: Oil and Gas Import Bill
(Oil, products, gas, LPG), billion (Oil, products, gas, LPG), billion $ $
20052005 19.5519.55
20062006 26.7926.79
20072007 31.2031.20
20082008 44.7844.78
Turkey: Oil and Gas Import BillTurkey: Oil and Gas Import Bill
(Oil, products, gas, LPG), (Oil, products, gas, LPG), billion billion $$Oil and Oil and
productsproductsGas and LPGGas and LPG
20052005 12.4112.41 7.147.14
20062006 16.6116.61 10.1810.18
20072007 19.3419.34 11.8611.86
20082008 26.9826.98 17.8017.80
Turkey: Gas Imports (2007)Turkey: Gas Imports (2007)(billion cubic meters) (billion cubic meters) (%)(%)
Russian Russian FederationFederation
23.2023.20 63.5 %63.5 %
IranIran 6.166.16 17.0 %17.0 %
AlgeriaAlgeria 4.284.28 11.9 %11.9 %
NigeriaNigeria 1.421.42 4.0 %4.0 %
AzerbaijanAzerbaijan 1.281.28 3.6 %3.6 %
TOTALTOTAL 36.3436.34 100 %100 %
Source: BOTAŞ, 2009
Proposed Pipeline: Proposed Pipeline: NABUCCONABUCCO
Availability and reliability of Availability and reliability of alternative sourcesalternative sources– Azerbaijan, Iran, Iraq, EgyptAzerbaijan, Iran, Iraq, Egypt
Economical considerationsEconomical considerations Energy security concernsEnergy security concerns Transit issuesTransit issues Geopolitical dimensionGeopolitical dimension
The Geopolitical DimensionThe Geopolitical Dimensionof the “Energy Games”of the “Energy Games”
US Policies/StrategiesUS Policies/Strategies Russian Policies/StrategiesRussian Policies/Strategies EU policies/StrategiesEU policies/Strategies Turkey’s Policies/StrategiesTurkey’s Policies/Strategies
The U.S.The U.S. After the dissolution of the Soviet Union:After the dissolution of the Soviet Union:
– Multiple pipelines: “East – West Corridor”Multiple pipelines: “East – West Corridor”– ““Russia first”Russia first”
Rhetoric and realityRhetoric and reality– New pipelines still through the Russian territory New pipelines still through the Russian territory
(Baku-Novo early oil pipeline)(Baku-Novo early oil pipeline) Baku – Dagestan PLBaku – Dagestan PL Caspian Pipeline Consortium (to Novorossisk)Caspian Pipeline Consortium (to Novorossisk)
Antagonising Russia: Black Sea matters to Antagonising Russia: Black Sea matters to include Georgiainclude Georgia
Containing IranContaining Iran Invasion and instability: IraqInvasion and instability: Iraq
The Russian FederationThe Russian Federation
http://www.russiablog.org/RussianBearGasEU.jpgCartoon from the May 4, 2006 issue of The Economist
Russian Policies/StrategiesRussian Policies/Strategies
Create gas import dependencyCreate gas import dependency Control the alternative sources Control the alternative sources
(Turkmenistan, Kazakhstan, Uzbakistan, (Turkmenistan, Kazakhstan, Uzbakistan, Azerbaijan?, Iran)Azerbaijan?, Iran)
Increase the gas priceIncrease the gas price Negotiate the price and other critical Negotiate the price and other critical
issues for increasing RF presence (stake) issues for increasing RF presence (stake) in those countries’ gas and electricity in those countries’ gas and electricity sectorssectors
For Azerbaijan and Georgia: from $110 to For Azerbaijan and Georgia: from $110 to $230 since January 2007$230 since January 2007
RF StrategyRF StrategyA typical example: ArmeniaA typical example: Armenia
ARMROSGAZ: Gazprom’s stake: from 45 % to ARMROSGAZ: Gazprom’s stake: from 45 % to 58%58%
Russian share in INTERUES: 80 %Russian share in INTERUES: 80 % Gazprom, took over the operation rights of Gazprom, took over the operation rights of
Iran-Armenian gas pipelineIran-Armenian gas pipeline RF, owns 100% of Armenian Telecom RF, owns 100% of Armenian Telecom Russian UES, owns 100% of the Metsamor Russian UES, owns 100% of the Metsamor
Nuclear Plant Nuclear Plant RF; controls the Iran’s and Turkmenistan’s RF; controls the Iran’s and Turkmenistan’s
gas export routesgas export routes
EU Policies/StrategiesEU Policies/Strategies
Propose multiple solutions to limit Propose multiple solutions to limit Turkey’s negotiating positionTurkey’s negotiating position
Use “Energy Charter Treaty” to cut Use “Energy Charter Treaty” to cut Turkey’s aspirations for being a hubTurkey’s aspirations for being a hub
Jean-Arnold VINOISHead of Unit Energy Policy & Security of SupplyTUROGE, Ankara, 12/03/2009
NABUCCO Partners:
Import Dependency to Russian Gas (billion cubic meters, %)
Austria: Imports: 8.73 - from Russia: 6.85 Austria: Imports: 8.73 - from Russia: 6.85 (78.5 %)(78.5 %) Hungary: Imports : 10.95 - from Russia : 8.32 Hungary: Imports : 10.95 - from Russia : 8.32 (75.9 (75.9
%)%) Romania: Imports : 6.25 - from Russia : 3.95 Romania: Imports : 6.25 - from Russia : 3.95 (63.2 (63.2
%)%) Bulgaria: Imports : 2.85 - from Russia : 2.85 Bulgaria: Imports : 2.85 - from Russia : 2.85
(100%)(100%) Turkey: Imports : 30.50 - from Russia : 19.65 Turkey: Imports : 30.50 - from Russia : 19.65 (64 (64
%)%)
Source: BP Statistical Review of World Energy, June 2007
Note: Recently RWE (Germany also joined)
Construction already delayed for 3 Construction already delayed for 3 yearsyears
(from 2008 to 2011)(from 2008 to 2011)
2005 October report 2009 March report
Source: Reinhard Mitschek, Managing Director, Nabucco Gas Pipeline International GmbH; 8th Turkish Int‘l Oil&Gas Conference, Ankara,
March 12, 2009
Seems tough without Russia…Seems tough without Russia…
5 Feb. 20083 Oct. 2005
Copyright: OMV
Unresolved issuesUnresolved issues
Price of Azerbaijani (Shah Deniz) gasPrice of Azerbaijani (Shah Deniz) gas Transit issuesTransit issues Amount to be taken by TurkeyAmount to be taken by Turkey Problems with the other alternativesProblems with the other alternatives
– IranIran– IraqIraq– EgyptEgypt
Russia’s position is stregtheningRussia’s position is stregthening
TARGETS IN INTERNATIONAL PROJECTS
ENHANCED
SECURITY OF SUPPLY
ACCESS
TO
CHEAPER GAS
TRADE
AND
TRANSIT
Some kind of netback price mechanism for domestic consumption
Cost-based transmission tariffs
Partial exemption from TPA for trading of excess volumes
Removal of final destination clauses
Balanced diversification of supplies
Underground storage capacities to serve both domestic market and end consumers in Euope
Use of existing infrastructure and idle capacities to the extent possible
Sorce: Emre Engür, BOTAŞ
Trans-Caspian
Turkmenian Gas
Egyptian Gas
Arab Gas PL
Iraqi Gas
Shah Deniz
Nabucco
ITGIArab Gas
PL
Blue Stream
Russian Gas-West
Nabucco
Trans-Caspian
Kazakh Gas
ITG
Iranian Gas
Bosnia Herzegovina
Austria
İzmir
Ceyhan LNG
TAP
Turkey as an East-West Energy Corridor, East-West Energy Terminal
ENHANCED
SECURITY OF SUPPLY
ACCESS
TO
CHEAPER GAS
TRADE
AND
TRANSIT
SUPPLY !!!
Ahiboz Hub
Turkey’s ConcernsTurkey’s Concerns
Diversifying gas importsDiversifying gas imports Securing it’s energy needSecuring it’s energy need Decreasing the energy import billDecreasing the energy import bill Commercial benefits Commercial benefits
Announcement before take-offAnnouncement before take-off
““If you are travelling with If you are travelling with children, or are seated next to children, or are seated next to
someone who needs someone who needs assistance, assistance,
place the mask on yourself first, place the mask on yourself first, then offer assistance”then offer assistance”
CaucasCaucasiian Energy Securan Energy Securiity ty & & TurkeyTurkey
Necdet PAMİRNecdet PAMİRBoard Member, World Energy Council Turkish National Board Member, World Energy Council Turkish National
CommitteeCommittee26-27 June 2009, İstanbul26-27 June 2009, İstanbul
OutlineOutline
World energy consumption: Today and World energy consumption: Today and 2030 (Dominance of fossil fuels)2030 (Dominance of fossil fuels)
Distribution of oil and gas reservesDistribution of oil and gas reserves How important is Caucasus for energy How important is Caucasus for energy
security?security? US, Russian, EU policies/strategiesUS, Russian, EU policies/strategies Turkey’s concernsTurkey’s concerns Operational and proposed projectsOperational and proposed projects NABUCCO: An excellent example to the NABUCCO: An excellent example to the
struggle of global and regional powersstruggle of global and regional powers
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