EU’s Kosovo mission widening – Minority situation worsening

May 31, 2009

The new report made by Minority Rights Group International (MRG) gives a bare picture about worsening situation of minority rights in today’s Kosovo. Instead to return to their homes after ethnic cleansing implemented by Kosovo Albanians after Nato intervention 1999 minorities are beginning to leave Kosovo, because they face exclusion and discrimination. This negative process is happening in international protectorate where EU is implementing one of its biggest civil crisis management operations and once again demonstrates the huge gap between high flown ideas, aims, programmes and statements made in Brussels and their implementation on the ground.

After nearly ten years of international administration – the longest and most expensive since the creation of the UN – Kosovo remains one of the most segregated places in Europe, with thousands of displaced persons still in camps, and many ‘ethnically pure’ towns and villages. The great failing of international rule in Kosovo over the last eight years has been that instead of breaking down segregation it has made it worse. Kosovo has become ever more divided into Albanian and Serb areas, with all other groups – Bosniaks,Croats, Gorani, Roma, Ashkali, Egyptians and Turks – being marginalized.

Minority Rights Group International (MRG) is a London based nongovernmental organization (NGO) working to secure the organization (NGO) working to secure the rights of ethnic, religious and linguistic minorities and indigenous peoples worldwide, and to promote cooperation and understanding between communities. More about MRG and its full report – released on 27th May 2009 can be found from here

No international protection

IMRG report notes, that since Kosovos declaration of independence on 17 February 2008, there has been a vacuum in effective international protection for minorities in Kosovo. A lack of certainty over the status of the territory has limited the practical application of international human rights law. There is a danger that the new international organizations operating in Kosovo, including the European Union Rule of Law Mission (EULEX) and the International Civilian Representative (ICR), will compound the failure of the United Nations Mission in Kosovo (UNMIK) to ensure a tolerant, multi-ethnic society in which equality, on-discrimination and the rights of minority groups are protected.

No political will   

A lack of political will among majority Albanians and poor investment in protection mechanisms have resulted in minority rights being eroded or compromised in the post-independence period. Smaller minority communities have yet to see resolution or redress for oppression and human rights violations since the late 1990s, such as attacks and occupation of the homes of Bosniaks, Croats and Gorani, and an inability to exercise their language rights in public for fear of harassment. Many smaller minorities, such as Roma, Ashkali and Egyptians, who were displaced from their homes, have faced severe difficulties in returning. Smaller minorities also suffer from lack of access to information or to tertiary education in their own languages, and discrimination due to association with the former Serb majority.  This, combined with tough economic conditions, means that some members of minority communities, including Bosniaks and Turks, are starting to leave the new Kosovo altogether.

Organisational mess

Far from addressing Kosovos deep-seated problems, in the period since the declaration of independence, the actions of the new Kosovo authorities and the international community have instead created uncertainty and confusion, with increasingly complex, multi-layered executive governance structures in Kosovo. As a result there are currently numerous international and domestic actors with interrelated yet conflicting mandates operating in Kosovo. Since independence, the international community has been preoccupied with resolving legal and institutional complications surrounding the status of their international missions. Yet structures put in place have also perpetuated international actors lack of legal accountability and complicated minorities access to the European Court of Human Rights (ECHR) and to other international legal remedies against Kosovo authorities. They have also made engagement with and formulation of policy toward Kosovos smaller minority communities a low priority. Given the history, the European Union (EU) and other international actors should instead accord a central role to promoting the rights of minorities in Kosovo, including by improving the critical assessment of Kosovos record on minority protection as part of the EU accession process.  More also in my article “EULEX, UN and mess-up in Kosovo”

Reversing needed

MRG warns that unless this trend is reversed, it will see the steady migration of minority groups who have lived in Kosovo for hundreds of years, such as Bosniaks and Turks, and who have other states to migrate to. A decade after the conflict people from minority communities still languish in displaced camps in dire conditions near Mitrovica. For Ashkali, Egyptian and Roma, who have no other countries to escape to, these trends are likely to lead to engrained poverty and further marginalization for generations to come, the report says. One description about Roma case in Mitrovica can be read from my earlier article “UN death camps, EU money, local negligence”

Lack of accountability

Also Amnesty International has came to similar conclusions. It accuses UNMIK for human rights violations in its recent report on the human rights in the world. AI noted that UNMIK has failed to address violations of human rights committed by the international community in Kosovo and the war crimes cases. The report also claims that the number of refugees that have voluntarily returned to Kosovo is very small. AI said that the Constitution of Kosovo adopted by its Assembly has failed in creating effective institutions for overseeing human rights and guaranteeing rights of women and non-Serb minorities.

Lack of accountability persisted for past human rights violations by UNMIK personnel against people in Kosovo. In October the EU agreed that US citizens participating in the EULEX mission would not be accountable to the EU for any human rights violations they might commit.  Impunity for past inter-ethnic violence prevailed. In July the OSCE reported that only 400 prosecutions had been brought in 1,400 cases reported to the police after the ethnic violence of March 2004, in which 19 people were killed and more than 900 injured. Trials were delayed when witnesses, including police officers, reportedly failed to attend court or provided conflicting statements; sentences imposed were inconsistent with the gravity of the offences.

Bottom line

To avoid further ethnic cleansing and grave human rights abuses, it is particularly important to examine how to address this recognized deficiency when protecting minority rights. From my point of view especially EU – as biggest donor and as implementing its biggest civil operation in Kosovo – should revise its practice with civil crisis management operations. The key elements according my opinion are

  • realistic situation analysis instead of appropriate political presumption,
  • participatory planning together with local stakeholders instead of desktop planning,
  • full project cycle management instead of ad hock projects and
  • utilizing feedback from the operational theatre instead of fixed programs.

More about tensions in Kosovo e.g.



Discovering the EP with Europarltv videos

May 25, 2009

While European Parliament elections soon are coming I was curious to see how EU propaganda machinery with their countless millions of taxpayers’ money is putting their best to attract public to cast their vote.  So I opened Europarltv which launched a series of videos explaining the history the Parliament, how it works and why to vote. Here is feedback of my wasted time:

First impression was that I am watching some practice videos made by some primary school hobby group under supervision (without supervision the pupils probably would be much more creative). Maybe producers have selected a line explain EU/EP for dummies but I wonder is the target group really the same than with shopping tv, where brain-dead people who have nothing more important in life than buy multiple priced bullshit from divan.

To avoid boredom I tried to concentrate to content. Interested in history I watched few videos including response to holocaust denial, some allegorical Hemingway quotation as starting step towards European Constitution in 1984 etc. I bet that EU history has much more interesting aspects than selected. Indeed a couple of weeks ago Adam LeBor published a conspiracy thriller “The Budapest Protocol” based real event in Strasbourg on August 10, 1944. There Nazi officers ordered a group of German industrials to plan for Germany’s post-war recovery – the Fourth Reich – an economic empire known later as European Union. (more about US intelligence document related to Nazi’s secret post-war plans in Mail on Sunday )

Abandoning history and fictions an interesting video headline was “Who decides in Europe?”.  The main claim was that no law which are in EU’s limits – will pass without EP. Correct! What was said only indirect was, that EP’s role is totally bystander. The formulations are made in Commission and decisions in Council of Ministers, EP can only slow this common development work not take the initiative. I think that producers tried to hide the insignificance of EP behind positive image of EU.

The official tv-spot highlights the same EU’s decision making dilemma. After imaginary news headlines the ad claims “You decide what tomorrows news will be”. Again correct! Your vote can have some influence in national elections and your government can be formulating the future EU policy with other national governments and EC; but where is the connections to EP elections – nowhere.

In conclusion I would say that EU could have used – or best not to use at all – its propaganda investment better; probably no big international company would waste money to marketing with so low standards. After EP videos it does not surprise me if the turnout is even lower than before.

One view about EU propaganda can be found from my post “ 20 bn propaganda


Discovering the EP with Europarltv videos

May 25, 2009

While European Parliament elections soon are coming I was curious to see how EU propaganda machinery with their countless millions of taxpayers’ money is putting their best to attract public to cast their vote.  So I opened Europarltv which launched a series of videos explaining the history the Parliament, how it works and why to vote. Here is feedback of my wasted time:

First impression was that I am watching some practice videos made by some primary school hobby group under supervision (without supervision the pupils probably would be much more creative). Maybe producers have selected a line explain EU/EP for dummies but I wonder is the target group really the same than with shopping tv, where brain-dead people who have nothing more important in life than buy multiple priced bullshit from divan.

To avoid boredom I tried to concentrate to content. Interested in history I watched few videos including response to holocaust denial, some allegorical Hemingway quotation as starting step towards European Constitution in 1984 etc. I bet that EU history has much more interesting aspects than selected. Indeed a couple of weeks ago Adam LeBor published a conspiracy thriller “The Budapest Protocol” based real event in Strasbourg on August 10, 1944. There Nazi officers ordered a group of German industrials to plan for Germany’s post-war recovery – the Fourth Reich – an economic empire known later as European Union. (more about US intelligence document related to Nazi’s secret post-war plans in Mail on Sunday )

Abandoning history and fictions an interesting video headline was “Who decides in Europe?”.  The main claim was that no law which are in EU’s limits – will pass without EP. Correct! What was said only indirect was, that EP’s role is totally bystander. The formulations are made in Commission and decisions in Council of Ministers, EP can only slow this common development work not take the initiative. I think that producers tried to hide the insignificance of EP behind positive image of EU.

The official tv-spot highlights the same EU’s decision making dilemma. After imaginary news headlines the ad claims “You decide what tomorrows news will be”. Again correct! Your vote can have some influence in national elections and your government can be formulating the future EU policy with other national governments and EC; but where is the connections to EP elections – nowhere.

In conclusion I would say that EU could have used – or best not to use at all – its propaganda investment better; probably no big international company would waste money to marketing with so low standards. After EP videos it does not surprise me if the turnout is even lower than before.

One view about EU propaganda can be found from my post “ 20 bn propaganda


Discovering the EP with Europarltv videos

May 25, 2009

While European Parliament elections soon are coming I was curious to see how EU propaganda machinery with their countless millions of taxpayers’ money is putting their best to attract public to cast their vote.  So I opened Europarltv which launched a series of videos explaining the history the Parliament, how it works and why to vote. Here is feedback of my wasted time:

First impression was that I am watching some practice videos made by some primary school hobby group under supervision (without supervision the pupils probably would be much more creative). Maybe producers have selected a line explain EU/EP for dummies but I wonder is the target group really the same than with shopping tv, where brain-dead people who have nothing more important in life than buy multiple priced bullshit from divan.

To avoid boredom I tried to concentrate to content. Interested in history I watched few videos including response to holocaust denial, some allegorical Hemingway quotation as starting step towards European Constitution in 1984 etc. I bet that EU history has much more interesting aspects than selected. Indeed a couple of weeks ago Adam LeBor published a conspiracy thriller “The Budapest Protocol” based real event in Strasbourg on August 10, 1944. There Nazi officers ordered a group of German industrials to plan for Germany’s post-war recovery – the Fourth Reich – an economic empire known later as European Union. (more about US intelligence document related to Nazi’s secret post-war plans in Mail on Sunday )

Abandoning history and fictions an interesting video headline was “Who decides in Europe?”.  The main claim was that no law which are in EU’s limits – will pass without EP. Correct! What was said only indirect was, that EP’s role is totally bystander. The formulations are made in Commission and decisions in Council of Ministers, EP can only slow this common development work not take the initiative. I think that producers tried to hide the insignificance of EP behind positive image of EU.

The official tv-spot highlights the same EU’s decision making dilemma. After imaginary news headlines the ad claims “You decide what tomorrows news will be”. Again correct! Your vote can have some influence in national elections and your government can be formulating the future EU policy with other national governments and EC; but where is the connections to EP elections – nowhere.

In conclusion I would say that EU could have used – or best not to use at all – its propaganda investment better; probably no big international company would waste money to marketing with so low standards. After EP videos it does not surprise me if the turnout is even lower than before.

One view about EU propaganda can be found from my post “ 20 bn propaganda


Discovering the EP with Europarltv videos

May 25, 2009

While European Parliament elections soon are coming I was curious to see how EU propaganda machinery with their countless millions of taxpayers’ money is putting their best to attract public to cast their vote.  So I opened Europarltv which launched a series of videos explaining the history the Parliament, how it works and why to vote. Here is feedback of my wasted time:

First impression was that I am watching some practice videos made by some primary school hobby group under supervision (without supervision the pupils probably would be much more creative). Maybe producers have selected a line explain EU/EP for dummies but I wonder is the target group really the same than with shopping tv, where brain-dead people who have nothing more important in life than buy multiple priced bullshit from divan.

To avoid boredom I tried to concentrate to content. Interested in history I watched few videos including response to holocaust denial, some allegorical Hemingway quotation as starting step towards European Constitution in 1984 etc. I bet that EU history has much more interesting aspects than selected. Indeed a couple of weeks ago Adam LeBor published a conspiracy thriller “The Budapest Protocol” based real event in Strasbourg on August 10, 1944. There Nazi officers ordered a group of German industrials to plan for Germany’s post-war recovery – the Fourth Reich – an economic empire known later as European Union. (more about US intelligence document related to Nazi’s secret post-war plans in Mail on Sunday )

Abandoning history and fictions an interesting video headline was “Who decides in Europe?”.  The main claim was that no law which are in EU’s limits – will pass without EP. Correct! What was said only indirect was, that EP’s role is totally bystander. The formulations are made in Commission and decisions in Council of Ministers, EP can only slow this common development work not take the initiative. I think that producers tried to hide the insignificance of EP behind positive image of EU.

The official tv-spot highlights the same EU’s decision making dilemma. After imaginary news headlines the ad claims “You decide what tomorrows news will be”. Again correct! Your vote can have some influence in national elections and your government can be formulating the future EU policy with other national governments and EC; but where is the connections to EP elections – nowhere.

In conclusion I would say that EU could have used – or best not to use at all – its propaganda investment better; probably no big international company would waste money to marketing with so low standards. After EP videos it does not surprise me if the turnout is even lower than before.

One view about EU propaganda can be found from my post “ 20 bn propaganda


Is it Time to Bury Nabucco?

May 21, 2009

Latest developments during last weeks related the EU’s policy of diversifying Europes’s energy supplies give a clear indication that EU’s pipedream – Nabucco – is vanishing while the rival Russia’s South Stream gets a boost both on the ground and updated aims. European Commission has tried enhance Nabucco already some nine year with modest or even backward success. Now is maybe the right time to reconsider EU’s energy plans in new context.

Russia will propose including the South Stream gas pipeline to pump natural gas from Russia to the Balkans and onto Europe in a list of EU priority projects, a Gazprom deputy CEO said Tuesday. “We are drafting an application for inclusion of the South Stream project into the list of EU priority projects, and we see no grounds why this application should be rejected,” Alexander Medvedev told journalists during a break at an international energy conference in Berlin.

Earlier Nabucco got its priority status in EU as the aim was to diversify supplies away from Russia.  Now Gazprom is to make a presentation to the European Parliament to promote South Stream later in 2009. The EU Energy Commission says Gazprom would have to prove South Stream represents “added value” for Europe to become a priority, earlier the EU has already accepted Gazprom’s Nord Stream as a priority project.

Boost to South Stream

On May 15 South Stream project got a boost two step closer to reality. As I mentioned in my previous article in addition to Italy’s ENI, Gazprom signed memoranda of understanding with Greek natural gas transmission company DESFA, Serbia’s Srbijagas and Bulgarian Energy Holding.  What I didn’t knew then was that at a meeting in Sochi, attended by Russian Prime Minister Vladimir Putin and Italian Prime Minister Silvio Berlusconi, Russia’s Gazprom and Italy’s ENI agreed to double the planned pipeline’s capacity to 63 billion cubic meters from previous plan 31 bcm/y.  So at same day the establishment of joint ventures for the construction of South Stream pipeline was finally provided with a formal basis and the project doubled estimated gas flow. This Gazprom’s move strengthens their competitive advantage over Nabucco and at the same time affirm its dominance in the field.

The pipeline would cross the Black Sea at 2.000m depth and from there to the city of Barna, in Bulgaria and from there its north part will reach Austria after crossing Serbia while its south part will extend to Greece and Italy.

Signed contracts are boosting also regional economy. The Greek section of South Stream will cost between 700 to 1000 Mln Euros, the section in Serbia is estimated cost some  700 Mln Euro, costs in Bulgaria  depend if gas is going existing or totally new pipeline. Further investments related to final route(s) of pipes are possible also in Croatia and Slovenia.  After the gas flows the transit fees can be remarkable in transit countries.

Desperate search for gas by Nabucco

The economic viability of the Nabucco project has long been questinable. EU has only committed a small fraction of the €7.9 billion ($10.6 billion) needed to build the pipeline. The basic question is where the gas for Nabucco (ultimately targeted at 31 billion cubic meters per annum) will come from. If there is no good answer coming soon the today’s and tomorrow’s potential investors are looking better alternatives.

But despite the recent progress on Nabucco, it all still looks to many analysts like a case of too little, too late. “I believe Nabucco still looks very problematic,” says Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies. “It might work, or it might not, but I don’t think it’s going to work quickly.” He argues that the pipeline probably won’t be viable until around 2020—much later than the 2014 starting date currently being advanced.

Nabucco’s supply base has been vanishing with latest developments.  Original idea was to get gas from Azerbaijan, Turkmenistan and Kazakhstan.  Gazprom’s newfound willingness to offer cash on the barrelhead for Turkmen and Kazakh gas led to Kazakhstan’s permission to construct a new pipeline that will feed gas from Central Asia into Russia’s export network.  The United States Senate offers verbal support, but Washington is no closer to brokering the tradeoffs that would be necessary for Nabucco to get off the ground.  Same time Gazprom is ready to buy all the gas from the second stage of an offshore Azeri development and Azerbaijan stll lacks a direct gas link to Europe and has been unable to agree with Turkey on terms for the transit of larger planned volumes.

Ongoing sanctions against Iran made an extension line from Turkmenistan to Turkey a non-starter.  They also meant that no Western government could countenance even an informal arrangement where Iranian gas might compensate Turkey so that more gas flowing through Nabucco would reach other European markets.

Nabucco tinkering with Middle East dreams while South Stream works on the ground in Europe

A couple of days after Sochi meeting four UAE and European companies told an oil and gas contracts between them and the Kurdish Regional Government (KRG) to supply gas from Iraq’s Kurdistan region to kick-start the Nabucco pipeline project to supply Europe.

The Iraqi government on Monday 18th 2009 rejected an $8 billion Kurdish plan calling new contracts illegal.  The KRG, which has clashed with Baghdad over draft oil legislation, has countered that the deals are legal and comply with Iraq’s constitution. In Iraq gas normally has been a side-product in oilfields so increasing gas production has been related increasing oil production.  Whatever the legal output will be a strong estimation is that gas starts flow for export after 2020.

Schroeder’s view

Speaking at a business meeting in Russia’s Kaliningrad on Monday, Schroeder, who chairs the Nord Stream shareholders’ committee, said that Russia cannot be blamed for recent gas shortages at the EU.

“When we get Russian gas, the problem is not the supplier, but the fact that 80 percent of the pipeline is located in the Ukraine. We should look for independence not from Russia, but from such transit schemes,” he was quoted by RIA Novosti as saying. “Both Nord Stream and South Stream allow to avoid unstable transit countries,” Schroeder added.

My view

As Nabucco’s supply base has vanished and its economical reliability is going same way while South Stream is gaining distance on the ground it is time to revise European Commission’s pipedreams. Does EU want be dependent on Russia’s gas (South and Nord Stream), Ukraine’s transit (today’s lines), Turkey’s blackmail combined middle-East as supplier (Nabucco)?

Power play has many aspects – I have touched only gas.  Searching and increasing use of renewable energy sources, increasing nuclear energy, decreasing consumption etc are all as part of a whole.  However from my point of view need of gas will be the at least the same if not bigger than today in EU and Europe for next two-three decades.

I would like to see EU to change priority status from Nabucco to South Stream.  Nabucco could still be kept alive in case to wait stabilisation in middle-East.  Besides whole the time there is improvements in liquefaction plants and tankers to increase the share Liquefied natural gas/LNG compared to gas supplied via pipes.  Selecting South Stream now could secure its smooth implementation before 2015; help EU focus other aspects of its energy sources and policy and improve EU-Russia relationship with its geopolitical consequences.

Sources and more about topic:


EU’s big choice – Nabucco or South Stream?

May 15, 2009

Despite the efforts to save energy a strong scenario for near future is that the quantity of gas needed in EU region will remain same as today if not bigger.  sources of gas are widely known the essential question is how the gas is arriving to European markets.  Environmental and technical aspects can be handled as well economical ones; the real battlefield is (geo) political and it’s much more effective than energy issue itself.

In today’s Europe the core of energy war is the struggle between South Stream and Nabucco pipe lines, which also is one of the most divisive issue inside EU.  The Brussels bureaucracy favour the Nabucco project, a transit route bypassing both Russia and Ukraine, while a part of EU member states, EU energy giants and gas producers are favouring Russia’s South Stream.

Latest developments


EU, Russia as well companies interested about gas business have all activated when decisions are needed to define the final route of gas to European markets.

a) EU


The common factor with both pipelines is that they are eliminating Ukraine’s transit monopoly.  Publicly EU has probably due political motives planned update Ukraine’s gas pipeline network like during The International Investment Conference on March 23rd 2009 in Brussels. Russia has not been invited to discuss the terms of gas supplies to Europe via Ukraine’s gas pipeline network for three years but Ukraine is hoping part of requested $5.5 bn modernization costs from EU in name of EU energy security. Gas buyers and transit operators may have their views, but the question still remains what they can buy and on which terms.  EU bureaucrats are making a fatal miscalculation if they are building energy infrastructure without source of energy itself.

The EU Commission has included the Nabucco pipeline in its list of priority projects,  despite pressure from Germany and Italy. But the EU cut its budget funding of the project by 20% getting some 200 million euros for first stage of the project.Nabucco is likely to rely heavily on subsidies from the EU. Several member countries questioned the economics of the project.

The European Union and Turkey gave fresh political impetus on 8thMay 2009 in Prague to the Nabucco pipeline project, although key Central Asian gas suppliers held off on pledging their support. But it also needs gas, which may be a problem as Kazakhstan, Uzbekistan and Turkmenistan refused to sign the final declaration in Prague, unlike two other suppliers — Azerbaijan and Egypt — and two key transit nations — Turkey and Georgia. But Mr Gul also made clear he expected some progress on Turkey’s stalled EU membership talks.  Earlier Turkey’s premier, in a rare visit to Brussels on January 19, tested Europe’s reaction, saying that he will review his support for Nabucco if the Energy Chapter of its EU accession talks is blocked. “If we are faced with a situation where the energy chapter is blocked, we would of course review our position,” he said. (Neweurope 26 January 2009) The Declaration of Southern Corridor Summit here .


b) Russia


Russia has floated plans for a new global treaty on trade in fossil and nuclear fuel in an attempt to consign to history an earlier pact, the 1991 Energy Charter Treaty. Russian President Dmitry Medvedev unveiled the project during his state visit in Finland on 20th April 209. “Our task today is to maintain, or rather ensure for the future, the balance of producers of energy resources, transit states and consumers of energy resources,” he said. The new pact is to cover oil, gas, nuclear fuel, coal and electricity and to include the US, China and India as well as European countries.

On 15th May 2009 four agreements shall be signed in Sochi: the national companies of Serbia, , Bulgaria and Italy shall sign agreement with the Russian ‘Gazprom.  One of them is agreement between Serbia’s Srbijagas and Russia’s Gazprom on route of Southern Stream pipeline through Serbia with length about 450 kilometers.  There shall be also a fifth agreement – bilateral agreement between Russia and Italy, which shall be signed by the Prime Ministers of the two countries, Vladimir Putin and Silvio Berlusconi. (Blic 13.5.2009)

c) Companies

The consortium behind the Nabucco now comprises six national energy companies: Botas (Turkey), Bulgargaz (Bulgaria), Transgaz (Romania), MOL (Hungary), OMV (Austria), and RWE (Germany). However on Jan. 25, 2008 OMV sealed a deal for a joint venture with Gazprom for extending Baumgarten’s storage and distribution capacity. Accordingly, Gazprom holds a 50 percent stake there.  Moreover, OMV has been buying into Hungary’s MOL. Considering Russia’s significant share in OMV, any amount of OMV ownership of MOL again translates into stakes for Russia’s energy giant. Even further challenging the Nabucco project is the fact that OMV and MOL, together with yet a third consortium member, Bulgargaz, have already signed up to Gazprom’s South Stream project.

Nabucco


The pipeline that the EU hopes will bring gas from the Caspian Sea to Austria takes its name from Giuseppe Verdi’s 1842 opera, Nabucco. The work tells the story of the oppression and exile of Hebrew slaves by Nabucco, a Babylonian king, better known to the English world as Nebuchadnezzar. The opera deals with the eternal quest for freedom, but the choice of name may yet prove fateful for a project that is facing so many obstacles to its completion.
The pipeline is supposed to transport around 30 billion cubic meters of gas annually. In terms of gas suppliers the project’s backers have named Iran, Iraq, Azerbaijan and Turkmenistan.

However Turkmenistan’s gas output is contracted to Russia up until 2028. Azerbaitzan also does not have the amounts required so as for the project to be profitable in the long run. The possibility of Iranian gas is far from realistic due to its nuclear program and the adamant denial by Israel and the opponent Sunni Arab states.  Nabucco is still counting on gas supplies from Azerbaijan despite a memorandum of understanding signed between Russia’s Gazprom and the State Oil Company of Azerbaijan SOCAR signed on March 30th 2009 clearly shows the growing interest of Azerbaijan in cooperation with Russia.

32 European countries are clients of Russia’s Gazprom.  Despite EU declarations and investment plans the US-backed Nabucco natural gas pipeline is dying a slow death. Even its strongest supporters have a hard time demonstrating its commercial viability. The risk for Nabucco is that if the supply and funding issues are not sorted out, the EU’s dream of energy freedom will remain an aspiration rather than a reality.

South Stream


Its planned route would run from the Russian Black Sea coast across the seabed to Bulgaria, then bifurcate into a southern branch to Greece and southern Italy and a northern branch into Serbia, Hungary, and Austria, with a potential detour to Slovenia and northern Italy.

Bulgaria and Hungary have both signed government agreements on joining South Stream. Austria is also in talks and has already agreed to sell Gazprom 50 percent of the shares in Baumgarten, the gas hub where Nabucco is supposed to end, while Turkey already operates a direct sub-marine pipeline linking it to Russia – Blue Stream.  Also Romania is open to investing in the Gazprom pipeline South Stream, not just the EU Nabucco project.

On December 2008, Russia and Serbia signed an umbrella agreement providing political guarantees that Serbia will receive a stretch of the South Stream gas pipeline and that the underground gas storage facility in Banatski Dvor will be finalized.  At the same time a 51 % stake of Serbian Oil Industry (NIS) was sold to Gazprom.Slovenia backed South Stream gas pipeline in the midst of a European gas crisis Jan. 2009 while Gazprom tried to secure pledges on the South Stream gas pipeline to Italy.  The Slovenian delegation said during the meeting the implementation of the South Stream project would both diversify the European energy sector and allow Russia to transit its gas without obstacles.  A portion of the pipeline would travel through Serbia and Hungary with options to include a leg through Slovenia to northern Italy.

In September 2008, Uzbekistan and Russia agreed to build a new pipeline with a capacity of 26 to 30 billion cubic meters (bcm) annually to pump Uzbek and Turkmen gas to Europe. Such a pipeline will again undermine the US efforts to pump trans-Caspian energy routes bypassing Russia.

The technical and economic assessment of the land where the pipeline will lie is planned to be completed by the end of 2009, while the assessment of facility’s underground stretches should be finished in early 2010.  Russia’s Gazprom plans to start gas deliveries to Europe through the future South Stream pipeline no later than 2015.

Iran

However, the whole situation is good for Iran. Some experts believe that without Iran the “Nabucco” project will remain unimplemented, while its participation could give an impulse to the process.  Iran has the  largest gas reserves in the world after Russia  and Turkmenistan (27,5 trillion cubic meters, or 18% of the world’s gas reserves and 33% of that of the OPEC).

But is there gas coming from Iran?  Iran uses the lion’s share of produced gas (360 million cubic meters daily) for civil purposes. By the year 2014 Tehran plans to provide gas to 93% of the population of 630 cities and to 18% of the rural population in more than 4,000 villages. Iran’s factories and electric power plants also need much gas. Another share of the produced gas Iran has to inject into its reserves to keep oil production at a high level (experts say this help Iran increase output by more than 30%). Iran has long been enjoying infrastructure for oil exports but yet has not such for exporting gas.

On February 21st 2009 the Iranian and Turkmeni governments signed an agreement that will give Iran the rights to develop the Yolotan gas field in Turkmenistan. The deal will help Iran resolve gas supply problems in its north-eastern provinces. Turkmenistan will sell Iran an additional 350 billion cubic feet of gas annually, more than doubling current supplies of almost 300 bcf a year, according to the agreement first disclosed by Iran’s official media and later confirmed by Turkmenistan.

Iran also recently offered to invest $1.7 billion for a 10 percent stake in the second phase of Azerbaijan’s huge Shah-Deniz gas field which will come on line by 2014. Iran already has a 10 percent share in the first phase and it wants to import large volumes of gas from the Azeri field. For Iran, the deals couldn’t be better suited to its objectives. It’s economically unviable currently to supply gas to its isolated, north-eastern third of the country. Getting gas from Turkmenistan would therefore make more Iranian gas available for export to Turkey. Also, connecting both Caspian countries to Iran via pipeline would allow Tehran to accomplish its long-held objective of transiting any gas production increases from its neighbours to customers in Europe, the Persian Gulf, or Asia.

Turkmenistan


Preliminary indications are the gas reserves in Turkmenistan is around 38.4 TCM – far more than Iran and just 20% lower than Russia. The biggest gas field discovery was in October 2008 – called the Yoloten Osman deposits. It is located near the Afghan – Turkmenistan border. Turkmenistan has contracts to supply Russia with 50 bcm annually, China with 40 bcm and Iran with 8 bcm annually. The Russian energy giant Gazprom requires this Turkmen gas to meet its export obligations in the European market, which accounts for 70% of the its total revenue. Gazprom sells 2/3 of Russia’s 550 bcm annual gas production in the rapidly growing domestic market. This compels it to secure Turkmen supplies to meet contracted European demands.

Nabucco vs. South Stream

Gazprom has received an invitation to join the Nabucco pipeline project to pump gas from Central Asia to Europe, but will not take up the offer, a deputy head of Russia’s energy giant said. In an interview with Vesti TV on Monday, Alexander Medvedev said Gazprom would stick with its South Stream project and stay out of Nabucco. “Unlike in the case of Nabucco, we have everything we need for this project [South Stream] to materialize,” he said. “We have gas, the market, experience in implementing complex projects, and corporate management.”

The Nabucco route does circumvent Ukraine, but it is from Turkmenistan and Kazakhstan, goes under Caspian Sea, passes across Azerbaijan, Turkey, and Georgia. So many countries in pipeline are creating multiple political risk compared to South Stream which goes from Russia under Black Sea directly to EU zone.  Besides, Nabucco is going to lack the resource base adequate to its transit capacities unless the project is joined, for example, by Iran, but this is politically problematic.
The shareholders of the Nabucco consortium are: Botas (Turkey), Bulgargaz (Bulgaria), MOL (Hungary), OMV(Austria), RWE(Germany) and Transgaz (Romania).  OMV, MOL and Bulgargaz have also signed up to South Stream pipeline, which bypasses Turkey. It is unrealistic to think that both South Stream and Nabucco will happen, but companies  want to make sure at least one of them happens and be part of that.

The current timeframe, assuming that the outstanding issues are resolved, is that Nabucco  would come on-stream in 2013, two years after Nord Stream, the planned Baltic pipeline, which has already secured both supplies and finance for the construction work.

Some geopolitical aspects

The EU’s new “southern corridor” has been dubbed a version of U.S. “Silk Road Strategy” aimed to block Russia from gas fields around Caspian Sea and its connection to Iran (More in my article “Is GUUAM dead?).   The South Pars natural gas field brings a new element to change original U.S. plan as it is a sign of a long-term energy alliance between Moscow and Tehran and with active participation of the EU. Turkey and Armenia may be join the project as transit countries. Naturally, this leaves Washington very few chances to lobby its energy projects in the region aimed at using Azerbaijan and Georgia as the so-called ‘Caucasus communication corridor’.

In addition Russia, Iran and Qatar have taken the decision to form a “big gas troika”.  The idea is that three countries – with 60 % of global gas reserves – will work on joint projects accross the entire gas chain from geological exploration and production to distributionand marketing gas. Alexey Miller – Head of Gazprom – stated at the end the meeting that “we are united by the world’s largest gas reserves, common strategic interests and, which is very important, high potential for cooperation within tripartite projects.

There is also a question about Turkey.  The South Stream pipeline will run from Russia directly to Bulgaria across the Black Sea. Russia is diversifying its gas supply routes so as not to depend on one transport hub. It might perhaps be cheaper to build the new pipeline along existing route of the Blue Stream, which crosses the Black Sea from Russia to Turkey, than to lay a new route on the seabed. This, however, would increase the aggregate capacity of the two streams to about 48 billion cubic meters, giving the Turks a great deal of influence on Russian supplies.Russia and the EU countries do not want this to happen.  On the other side Greece, which is taking part in the construction of an oil pipeline from Burgas in Bulgaria to Alexandroupolis, has announced its readiness to join the South Stream project. This makes sense, as apart from bringing economic dividends it will make Greece an international energy hub on a par with Turkey.

Bottom line

In conclusion EC is pushing imaginary project of Nabucco pipes with support of drowning USA who’s last straw of Silk Road blocking strategy Nabucco is.  EU countries as well non-member states are pushing national interests;  Iran, Turkmenistan and Azerbaijan are looking the best deal, Russia tries keep domination of gas markets and secure the resources, EU companies are playing with two cards to secure being with winners side and EP of course is bystander.

More my articles one may find from my BalkanBlog!


Follow

Get every new post delivered to your Inbox.

Join 146 other followers

%d bloggers like this: