Gulf and European Energy Supply Security - Feem-project.net

Energy Security: Potential for EU-GCC Cooperation
Nigeria possesses large gas reserves, but
gas fields are quite scattered. This requires that
important collection infrastructure is built. From
the current 12bcm/yr, the potential domestic
consumption could reach 35 to 40bcm/yr by 2030.
The positive corollary of this rather low consumption
for decades to come is that, providing appropriate
investments are done, the production surplus that
could be exported would be rather large.
In fact, the export potential could increase from a
small 21bcm today to 100bcm by 2030. While the EU
countries are likely to remain the main customers of
Nigerian gas, the US also may become an important
buyer. However, the previous arguments do not
take into account the instability of the Nigerian
political landscape. The area where most of oil
and gas deposits lie, the Niger Delta, is plagued by
constant unrest and violence since the Biafran war
in 1967. Although the country’s regulations offer
interesting prospects for IOCs, the possibility for
effective work is greatly hindered by local politics.
The characteristics of Nigerian politics render the
country a potentially unreliable supplier.
2.3 Norway
Norway has traditionally been a very important
gas supplier to Europe. Although it is not part of
the EU, it follows EU regulations and has proved a
perfectly reliable partner for decades. Important
resources are still to be extracted (3,000 bcm)
and perhaps even discovered. However, the OME
expects Norway’s production to start declining after
2030. This constitutes a potential risk, as Europe is
dependent on Norwegian gas.
2.4. North Africa
In a recent report, C. Spencer has drawn a
portrait in which Maghreb countries were depicted
as less reliable than commonly believed. 13 Internal
politics and the emergence of terrorist groups
create areas of tension detrimental to the economic
development of the region. However, while many
producing countries face internal problems, they
have proved reliable suppliers of oil or gas for many
decades. Therefore, any political analysis should be
analyzed critically.
Spencer lists in particular three main threats
common to Maghreb countries:
• Challenges to authoritarianism: Many political
leaders have managed to secure life-long grip
over power (through constitutional amendments
in Tunisia and Algeria). The conjunction of poor
economic performance and loss of aura gained
during the decolonization period offers the
possibility of social disturbances.
• Growth of Islamism and civil unrest: The
•
failure of the governments to foster economic
development through Western-imported models
has permitted the emergence of groups calling for
the regeneration of the society by Islamic values.
These groups range from political formations to
terrorist organizations such as Al-Qaeda in the
Islamic Maghreb. The latter remains a minority
fringe, but the wider movement has the capacity to
be “gently subversive” and to push for a completely
alternative way to organize society and politics.
Economic weakness (distorted development):
A very large fraction of the population of those
countries is composed of children and young
adults. In Morocco and Algeria, about 250,000
new job-seekers enter the work market each
year and about 16 million jobs will need to be
created by 2020 in the entire Maghreb region. If
governments fail to do so, unemployment will
certainly fuel social opposition to the established
political order and encourage a growth in radical
Islamic sentiment.
2.4.1 Algeria
Algeria possesses the 10th largest gas reserves
with 4.5 tcm proved in 2008. 14 Those reserves are
very large and concentrated in one field (Hassi
R’Mel), while the rest of Algeria has remained
largely under-exploited. New discoveries have been
rare and have only allowed the compensation of gas
already extracted, but more active prospecting and
reduction of flaring could drastically augment future
production from 90 bcm/yr today to about 180 bcm/
yr by 2030, according to OME’s projections. 15
On the geopolitical front, the problem of the
status of Western Sahara and the differences
between Algeria and Morocco should not be