Transcript Iran-Europe Dialogue on Central Asia and Caucasia (CA&A) Abbas Maleki

Iran-Europe Dialogue on
Central Asia and Caucasia
(CA&A)
Abbas Maleki
Roundtable on “Iran and European
Union Cooperation in Caspian Sea,
Central Asia, and Caucasus
Institute for Caspian Studies
March 11, 2007
Sources of Instability
-Radical approaches to Islam
-The lack of sustainable economic development
-Energy and its Route
-Effort to change the lifestyle of the peoples in
the region
-Corruption
-Policies of dominated powers in the region
-Ethnic violence
-Drug Trafficking
Radical approaches to Islam


Different interpretation of Islam in the
CA&C is one of instability sources.
Specifically, the extreme perceptions of
Islamic culture as different groups like
Hizbuttahrir are proposing.
A rigid, radical and unpopular version of
Islam which is very hard for the people
to obey it.
Lack of sustainable development
Total population of the CA&C is 73 millions:
-68% of 8 million in Azerbaijan, under the poverty line
-35% 15
Kazakhstan
-51%
5
Kirgizstan
-GDP/Capita:

-Tajikistan
$180

-Kirgizstan
270

-Uzbekistan
360

-Armenia
520

-Azerbaijan
600

-Georgia
630

-Turkmenistan 750

-Kazakhstan
1260
Energy export is not very high
Armenia
0.3 US billion Dollars

Georgia
0.3

Kyrgyzstan
0.5

Tajikistan
0.8

Azerbaijan
1.8

Turkmenistan 2.7

Uzbekistan
3.0

Kazakhstan
9.1
Compare with Saudi $135 and Iran $55 US billion

Orchestrated efforts by West to change
the lifestyle of the peoples in CA&C


Activities of rulers to weakening traditions,
customs
Neglected NGOs

Example: Kazakhstan advertisement in IHT, Nov. 12, 2003
title: "Kz is the outpost of struggle against fundamentalism".
Kz is the only country in the region in which Islamic
opposition does not really exist. Religion has never played an
important role in Kz, while Muslim organizations have been
influential in neighboring Uz and Td…..This means that the
Kazakhs are catching on to Western lifestyle and values.

The question is who is living with Kazakh lifestyle and
values in future?
Corruption
There is no good governance in the region
-Most of the Governments are totalitarian
regimes
-Most of the rulers are the former Secretary
General of local Communist Parties.
-Corruption Index shows
-Azerbaijan is the 4th most corrupted country
-Russia is the 7th
-Kazakhstan is the 20th
Energy in CA&C



Energy is one of the resources that
could support the development
But the geopolitics of pipelines is the
key factor for the phenomenon of new
dependency to other countries
Russia is trying to dominate all of
energy infrastructure in Eurasia
Energy Routes at a Glance
Middle East Sub Region
Asian Identity
ECO
(Economic Cooperation Organization)
Iran and CA&C


Iran has shown a rational, modest and economic
oriented model in the CA&C.
Iran’s activities for
-Establishing ceasefire in Nagorno Karabakh in
1994.
-Success to end the Tajik civil war is among them.
-Iran was eager to see more cooperation among
CA&C, proposed them the membership of ECO,
establishment of CASCO in 1992.
-An observer in Shanghai Cooperation
Organization
-Road and Rail networks for landlocked countries
Iran:
A look at the energy sector


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Iran has very ambitious plans in oil, gas
and petrochemicals;
Though the strategy on oil production
capacity increase remains a key debate
topic, major investments in this sector are
inevitable;
The legal framework remains an issue,
though slow changes are taking shape;
Iran’s focus in the next decade will be on
gas and also gas-intensive industries;
Next important event: Restructuring of
NIOC and consequent corporatization of
the energy sector companies.
Investments needed in Iran’s
energy sector 2005-2020
Sector
Investment Volume (in
$ billion)
Oil
40
Gas
45
Petrochemicals
25
Power Generation
20
KTI
1.1
Omsk
Samara
2.1
Pavlodar
1
Atyrau
2
1.2
4
Odessa
2.2
Novorossiysk Makhachkala
Actual
Supsa
Shymkent
3
2.3
Baku
5
Chardzhou
Ceyhan
1 – Atyrau-Samara
2 – CPC
1.1 – BPS
2.1 – Odessa-Brody-Gdansk
1.2 – Druzhba-Adria 2.2 – Constanta-Trieste
2.3 – Burgas-Alexandroupolis
Neka
3 – Aktau-Baku-Tbilisi-Ceyhan
4 – Kazakhstan-China
5 – Kazakhstan-Turkmenistan-Iran
Kazakhstan-Turkmenistan-Iran
Pipeline
• Study in process in accordance with the
Agreement on Joint Studies concluded
between KazMunayGas, Total, Japan
National Oil Corporation, and Inpex
• A Long-Term Export Option for
Delivering Kazakh Oil to Asian Markets
via Persian Gulf
Caspian Oil Terminals and Neka
Neka-Ray Old and New Pipeline (370 000 b/d)
Iran’s Free Zones in the North
North-South Corridor
Great Central Asia Routes
20%
13.6%
11%
Iran-Europe Energy Dialogue


The gas pipeline from CA to Iran then
Europe is a key project in trilateral
cooperation among three regions.
The study of the two routes from Iran to
Europe via Turkey and Ukraine had
been done.
Energy

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
Iran is energy giant, one of its feet on the
Persian Gulf, another on the Caspian, with
geostrategic advantages.
Europe is surrounded by the sea of gas, most
important of them: Russia, Iran and Qatar.
For Europe, the importance of CA&C is
dramatically increased, because member ship
of each central or Eastern Europe countries to
EU means a new demand for Energy.
Energy (2)


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-Iran can decrease isolation of central
Asia dramatically.
Iran now imports gas from Turkmenistan
to consume in the Northern part of Iran,
as imports oil from Kazakhstan.
Iran is end-user of the produced oil and
gas in the CA&C
Potential New Supplies to Europe
with Diversification of Supply



Caspian Sea region: Azerbaijan,
Turkmenistan, Kazakhstan,
Uzbekistan
Middle East region: Iran, Iraq
North Africa region: Egypt, Libya
Iran-Europe Energy Dialogue
Restraints

Freidman Muller has discussed, in the
past with political motivation, Europe
preferred to follow the Soviet gas
pipeline instead of the cheap and
costless Iranian gas. Now again,
because of US extraterritorial rules like
1995 ILSA, the oil and gas companies
can not invest more than 20 million
dollars in Iran's energy industries.
World NG Consumption
EU NATURAL GAS DEMAND & SUPPLY
OUTLOOK 2003 - 2025
600
( billion Nm3 )
500
400
300
200
100
0
2003
Indigenous production
2010
2015
Contracted imports
2020
Additional supplies
2025
Demand
Source: EUROGAS Report 2004
6
Proved natural gas reserves
at end 2006
Sources of Natural Gas Supply - European Union
2002
Indigenous
Production 53 %
2003
Net Imports 47%
Indigenous
Production 49 %
2030
Net Imports 51%
14%
Indigenous
Production 20 %
Imports 80%
14%
80%
18%
19%
49%
53%
3%
12%
12%
20%
6%
Import Norway
Import Russia
Indigenous Production
Import Algeria
Imports
Import Others
Indigenous Production
Source: Eurogas
Source: EU-forecast, EU Energy, Issue 86,
July 2nd, 2004
Forecast of Gas Supply – OECD Europe
OECD European gas balance, 1990 - 2030
1.000
bcmy
800
600
400
200
0
1990
2000
2010
Indigenous production
Africa
Middle East
Other
2020
Transition economies
Source: „Security of Gas Supply in Open Markets - LNG and power at a turning
point“, Edition 2004 (OECD/IEA)
2030
Nabucco
New gas supply route to Europe from
Turkey to Austria
via Bulgaria, Romania and Hungary
Project Partners
– OMV
• OMV Gas GmbH, Austria
– MOL
• MOL Natural Gas Transmission Ltd., Hungary
– Transgaz
• S.N.T.G.N. Transgaz S.A., Romania
– Bulgargaz
• Bulgargaz EAD, Bulgaria
– BOTAS
• Botas Petroleum Pipeline Corporation, Turkey
Nabucco corporate structure
OGG
MOL
1
TG
BG
Nabucco
International
Company
Nabucco
Austria
Nabucco
Hungary
Nabucco
Romania
Botas
NN
Nabucco International
FINCO
2
Nabucco
Bulgaria
Nabucco
Turkey
Missing link between giant gas sources
(in bcm) and potential markets
4,000
47,570
1,770
33,530
4,520
Supply Sources for Nabucco
Azerbaidschan
10-14 bcm
Egypt
8-10 bcm
Iraq
Iran
10-20 bcm
Nabucco Gas Pipeline
Strategic Goals of Project
– Opening a new gas supply corridor for Europe
from Middle East and Caspian regions
– Raise transit profiles of participating project
countries
– Contribution to security of supply for partner
countries
and for Europe as a whole
– Strengthening the turntable position of
Austrian pipeline grid and the Hub
Baumgarten within the European network
Feasibility Study Phase - Findings Technical Study
 Routing corridor defined
 Border crossings fixed
 Pipeline Diameter: 56“
VIENNA
BUDAPEST
 Distance: 3,300 km
BUCHAREST
 Investment: 4.6 bill. €
SOFIA
ISTANBUL
ANKARA
Project is
technically feasible
Project Phases
03
04
2005
06
07
08
09
10
11
12
13
Feasibility Study
Development
Constr.
1st step
2nd
step
Operating
& Marketing
14
US military around Iran
Final thoughts...

Central Asia and Caucasus are neighbors of Europe
and Iran

Europe is surrounded by sea of gas, Iran is one of
them

Divergence is important in energy supply

Instability in CA&C has impacts to the both sides

Interpretation of Islam is a key factor in these areas.

Iran’s path to the free world is Europe via North,
during tight situation.