Energy Export Potential in the Caspian Region and Its Impact on EU Energy Security

Abstract

Energy security has emerged in recent years as one of the cornerstones of the European Union’s (EU’s) foreign policy. The EU is highly dependent on imports of oil and gas, 35 per cent of which comes from Russia. Diversification of energy supplies is thus a key goal for the EU. The Caspian region contains some of the largest undeveloped oil and gas reserves in the world. The intense interest shown by the major international oil and gas companies testifies to its potential. Although the area is unlikely to become “another Middle East”, it could become a major oil supplier at the margin, much as the North Sea is today. As such it could help increase world energy security by diversifying global sources of supply. Development of the region’s resources still faces considerable obstacles. This study focuses on the countries along the southern rim of the former Soviet Union that are endowed with significant oil and gas resources: Kazakhstan, Turkmenistan and Uzbekistan in Central Asia, and Azerbaijan in Transcaucasia. The Southern Energy Corridor (SEC), which aims to link Caspian Basin and potentially Middle East gas supplies to Europe, is one of the EU’s six priority axes of energy infrastructures. Drawing on the external governance literature, this article provides an analysis of the EU’s efforts in the wider Black Sea area to increase its energy security. It concludes that despite difficult domestic and geopolitical obstacles, the EU is pushing forward its objective to establish the SEC.