Few notes from my speech at EU Model Simulation Game Project titled "Energy Policy of the European Union toward South Caucasus"

NOTE: The speech is not based on my personal opinion regarding these issues. As it was a "simulation game". My position was to simulate Foreign Minister of Russia Sergey Lavrov :)

Dear friends! Thank you very much for your attention. I welcome this opportunity to speak at this conference in oil rich city of Baku. First of all i would like to say that Russia has always been interested in energy security issues in the region and in the world. As we know it has huge amount of energy resources and is a biggest and influential country. We are deeply concerned in stability and and security of energy projects. We have historic ties with European countries and accomplished successful projects together which were based on mutual benefit and partnership. Russia has successfully overcome the role of energy supplier of EU and EU's energy provision even now depends mostly on Russia's resources today. We are willing to continue this act at the field of energy partnership and to enlarge the sphere of our cooperation. We understand that lately occurred problems which were caused by the dependence of the transit of Russian gas to Europe on Kiev and Minsk and the reluctance of the transit system. The expensiveness of land route which made gas substantially being illicitly siphoned off while being transported through Ukraine and Moldova. We consider the concerns of Europe and are ready to offer alternative routes that share the idea of diversifying energy transportation and increasing the reliability of Russian gas supplies to Europe. We strongly believe that new projects such as Nord Stream, South Stream, Blue Stream and other Russian proposed energy routes will increase the efficiency and stability of transition of Russian gas to Europe and will be important step toward for the energy solidarity and safety of Europe. We hope it will increase Gasprom's reputation in EU market which was spoiled by gas wars Ukraine. We are ready to continue providing Eu with our rich energy resources, this time based on stronger partnership which wil bring mutual benefit for both of US. Because we share same interests towards energy security. We are open to negotiations about new proposed projects. I also want to state that there are several new issues that we are deeply concerned off in favor of EU. As the idea of Russia's being left aside from some new proposed projects can cause serious crisis at worlds energy markets and bring up big questions about stability of energy transition to EU, energy security in the region at the same time in the world. It is obvious that without Russia's rich energy resources Europe's energy needs can not be guaranteed. Proposed Nabucco project is considerably far from reality. Nabucco project can not guarantee the energy security of Europe. Among the main causes of questionable "efficiency" can be pointed out the insignificance of the volume of gas that can be delivered by pipeline Nabucco; unstable political situation in potential supplier countries and transit countries; the unsettled relations between some of them; Uncertain status of the Caspian Sea and etc. I once again state, we protest the construction of a pipeline under the Caspian Sea on the grounds of the unresolved status of Caspian Sea and of environmental concerns. Also Turkmenistan holds responsibility for the long term contacts with Russia Iran and China on the delivery of large quantities of gas in these states. So Turkmenistan simply will not have any additional portion of gas which this state might export in western direction. As such, Turkmenistan which produces up 80 bcm gas per year in agreement with Russia annually out to export to these states 50 bcm gas. In addition Russia believes to revise and extend its contract until 2028 as well as raise level of Turkmen imported gas to 90 bcm per year. Some even consider Iran to be one of the potential suppliers for Nabucco. But for today Iran has no capital to invest in developing own fields, and despite the fact that the country has the second largest gas reserves after Russia, it was forced to reduce the supply of gas to Turkey in order to meet its own need in winter season of 2007. Iran has ( SouthPars) no sufficient capital or technology to start exploitation of its own reserves. Annually Iran produces 116 bcm gas and its internal consumption contains 117 bcm in a year. That means Iran also has no free portion of gas for export. ( +US sanctions against Iran ) We Russia, which also knows that the only potential supplier for Nabucco pipeline is Azerbaijan, has invited this country to sell all its gas to Russia at European prices. In this case to export gas in the Russian direction seems more favorable to Azerbaijan both politically and economically. Some experts believe that South Stream is alternative project in competition with Nabucco pipeline. I would rather say that Russian proposed projects are the only real and reliable sources to meet Europe's growing demands on the energy. I will re state my opinion citing energy minister of Russia Sergei Shmatko that "Nabucco and South Stream are far from being competitors." The resource and financial base of South Stream is more real. In this regard South Stream is more competitive than Nabucco. The South Stream project is aimed strengthening the European energy security. It is key project in diversification strategy for gas supply routes to the EU. The South Stream pipeline will ensure direct connection between hydrocarbons suppliers and consumer thus raising significantly the energy supply security on the entire European continent. Experts share the opinion that in medium and long term, gas demand will grow in EU according to the consensus forecast by the worlds leading forecast centers, Europe''s annual demand for additional gas import may surpass 240 bcm by 2030. The major objective of the South Stream project is meeting Europe's additional demand for natural gas, the most environmentally friendly and secure fossil fuel gas will long term remain a reliable foundation for the European energy sector. Therefore diversification of routes and implementation of joint projects to construct new offshore gas pipeline systems are vital elements of current energy security architecture of Europe. It is pleasure to know that we have a lot of partners in Europe who understand that "deterring" Russia on the gas and other energy markets doesn't meet their interests in the business, as well as in the regional and global security sectors. We proceed from the fact that the synergy of the mutually beneficial cooperation with foreign partners guarantees reliable energy supplies, brings significant profits into the buget, and fosters independence and mutual understanding, which is crucial for a successful business.