Institutional aspects of EU-Russia
Energy Cooperation
(an overview of challenges and issues to be addressed)
Michael I. S A V V A
Deputy Director
Department of Economic Cooperation
Ministry of Foreign Affairs
Russian Federation
State of play
 The EU-Russia energy cooperation is doing well
- Russian Exports of oil and gas have reached quite impressive
figures
 Cooperation is facing new challenges, particularly in
Legal Capacity building
- Negotiations on a number of important bilateral documents,
referring to the energy cooperation, remind a stalemate situation
Success stories and valuable assets
 EU-Russia Partnership and Cooperation Agreement
- signed on 24.06. 1994 (Corfu Island); expired on 01.12. 2007; it
is prolonged on a year by year basis according to the relevant
provision of the Agreement

Draft EU-Russia Basic Agreement (intended to replace the
expired PSA), negotiations started in 2008
 Set of bilateral agreements on energy cooperation between Russia
and EU member-countries
Projects jammed in the pipeline
 Transit Protocol (within the Energy Charter process)
- negotiations started in 2000; never completed; as a result Russia
officially informed the Depository on 20.08.2009 that it would not
become a Party to the Energy Charter Treaty, signed in December
1994
 Draft Convention on Global Energy Security
 Draft EU-Russia Agreement on joint functioning of the
United Electric Energy System of Russia and Energy
Systems of Estonia, Latvia and Lithuania in
synchronous mode.
 Draft EU-Russia Agreement on the implementation of
international infrastructure projects intended for energy
transportation
ENERGY SECURITY
Was ist das?
(What is that?)
 No generally recognized definition, so far
Supply and Demand equation
 Consuming countries : Energy security = Security of supply
unimpeded access to natural resources and uninterrupted supply
of energy at a low price
 Producing countries
: Energy security = Security of demand
sustainable demand and nondiscriminatory access to markets in
order to sell the energy at a competitive price
Equator length -40.075,7 km
Total capacity -164.000 km
Natural Gas Pipelines of
the Former Soviet Union
CENTRE for GLOBAL ENERGY STUDIES
17 Knightsbridge, London SW1X 7LY, UK
Tel: +44 (0)20 7235 4334
Fax: +44 (0)20 7235 4338
Merits and Benefits
of energy cooperation
 Russian exporters are making good money on the EU
market
 Triple benefit effect for the EU:
- It gets energy resources, which are much needed to sustain its
economic growth on a long term basis
- The supply of Russian natural gas is supportive to the EU goals
on reduction of greenhouse emissions
- Money spent on energy products from Russia magically returns
back to EU countries in form of Russian payments for equipment,
goods and services
Caspian hydrocarbons as a major option
for the diversification of energy supply
… or why Russia is so important for the
energy supply of the EU
Oil Production
ofAzerbaijan and Kazakhstan
(mln tons per year)
80
70
60
50
Azerbaijan
40
Kazakhstan
30
20
10
0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Sources: International Energy Agency (IEA) Oil Information, 2011
Oil Production
Azerbaijan, Kazakhstan and Russia
(mln tons per year)
600
500
400
Azerbaijan
300
Kazakhstan
Russia
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sources: International Energy Agency (IEA) Oil Information, 2012
Oil Production
Azerbaijan, Kazakhstan, Russia and Saudi Arabia
(mln tons per year)
600
500
400
Azerbaijan
Kazakhstan
300
Russia
200
Saudi Arabia
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sources: International Energy Agency (IEA) Oil Information, 2012
Gas Production (bln cub m)
of Azerbaijan, Kazakhstan, Turkmenistan and Russia
670,5
700
600
500
400
2011
300
200
100
0
25,7
Azerbaijan
39,5
Kazakhstan
60
Turkmenistan
Russia
Sources: International Energy Agency (IEA) Gas Information, 2012
State Statistics Agencies of Azerbaijan, Kazakhstan and Russia
Try to bypass it …
ALL WE NEED IS … AN INTERFACE
The first US-Soviet joint space flight APOLLO-SOYZ took place on 15 July 1975
The basic importance of sovereign equality
 In particular, sovereign equality includes the following elements:
 (a) States are judicially equal;
 (b) Each State has the right freely to choose and develop its
political, social, economic and cultural systems;
 Declaration on Principles of International Law Concerning Friendly
Relations and Co-operation among States in accordance with
the Charter of the United Nations, G.A. res. 2625, Annex, 25 UN
GAOR, Supp. (No. 28), U.N. Doc. A/5217 at 121 (1970).
CONCLUSIONS
 Cooperation with Russia will be crucial for the energy security,
economic growth and prosperity of the EU
 The EU market will remain of strategic importance for Russia in the
foreseeable future
 Therefore, the EU and Russia are strongly motivated to further
promote the energy cooperation
 A new Institutional Interface in the form of an Agreement (or a set
of agreements) is in great demand to grant non discriminatory
access to markets, facilitate flow of capitals and protection of
investments in energy assets
 The principles of equal rights and mutual advantage shall be
regarded as the basis for the Institutional Capacity Building in this
area
 Long term contracts and their essential provisions, particularly the
“take or pay” rule, remain crucial for the reliable energy supply, as
well as for a fair share of risks and benefits between producers
and consumers of energy resources.
Спасибо!
Thank you!