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

Energy Security: Potential for EU-GCC Cooperation
Only countries which respond positively to
these three criteria may be considered potentially
important future supply sources.
Domestic consumption will be the primary
factor that will determine the volumes of natural
gas available for export by the Gulf countries and
will certainly constrain future exports. Countries
with significant oil production – such as Saudi Arabia,
the UAE and Iran – or wishing to develop domestic
industries (petrochemicals) and infrastructure
(power plants and desalination facilities) will use gas
either to re-inject it in oil fields or as a substitute to
oil for the domestic economy. Consequently, the
share of gas available for export could be extremely
low (close to 20 percent, if not less). Saudi Arabia,
in particular, could be an important exporter of
gas but has a policy to reserve gas for domestic
consumption.
Other producers from the Gulf, such as Kuwait
and Oman, have produced limited quantities of gas
so far and are not likely to become major exporters.
Political instability is the greatest in Iraq and Iran.
Iraq is just slowly coming out of a seven-year war and
is as far as a country can be from being a stable state
presenting the attributes of a solid government and
a unified population. As noted by Stansfield: 22
Iraq has fractured into regional power bases.
Political, security and economic power has devolved
to local sectarian, ethnic or tribal political groupings.
The Iraqi government is only one of several ‘statelike’
actors. The regionalization of Iraqi political
Table 2. Gulf Countries’ Proven Reserves
Natural gas:
Proved reserves at end 2008
Trillion
cubic Share of
metres world total
Iran 29.61 16.0%
Qatar 25.46 13.8%
Saudi Arabia 7.57 4.1%
United Arab Emirates 6.43 3.5%
Iraq 3.17 1.7%
Kuwait 1.78 1.0%
Oman 0.98 0.5%
Yemen 0.49 0.3%
Bahrain 0.09
(Source: BP 2009)
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life needs to be recognized as a defining feature of
Iraq’s political structure.
Moreover, the recent departure of US troops
from the Iraqi soil is in itself a supplementary cause
for concern, as this event could lead to even more
instability.
Oil production in Iraq is unlikely to reach the levels
prevalent under the Saddam Hussein regime any
time soon. This applies to gas even more because of
the higher complexity of the infrastructure required.
Nevertheless, Iraq should not be dragged out of the
natural gas geopolitical map, as the northern side
of the country (Kurdistan) enjoys a certain degree
of autonomy and could reach a higher level of oil
and gas productivity than the rest of the country.
Kurdistan could be seen as one of the major suppliers
of the Nabucco project.
Moreover, from a Gulf perspective, Iraq is the
shortest land route towards Turkey and Europe.
Relying on a pipeline linking Qatar to Turkey
through Iraq seems an unwise prospect over the
short term because of the insecure environment in
Iraq; but this solution must not be discarded though
its potential implementation will depend on the
political evolution of the region.
It is difficult to foresee the evolution of Iran,
but although the country experienced episodes
of violence and social unrest recently, after the
contested re-election of President Mahmoud
Ahmadinejad, the regime holds the reins of power
firmly and it is difficult, although not impossible, to
foresee a drastic alteration of its policy.
What is more important than the protests in the
streets of Tehran are the power games played behind
the scenes between the clerical leaders, opposition
parties and the leader of the Expediency Discernment
Council (Akbar Rafsanjani). These actors have
often supported diverging views and policies which
have prevented major advances from taking place.
Instead, in most cases, these differences have led to
stalemates and prevented the development of major
infrastructure, with the paradoxical consequence that
Iran has failed several times to honor its commitments
in gas-exporting projects.
Gas exports from Iran remain controversial
and a strong current exists in the Iranian Majlis