Energy pushes Turkey and EU closer

The European Union has to speed up membership talks with Turkey because it badly needs the nation as a reliable energy partner, José Manuel Barroso, the president of the European Commission, said Monday.

Barroso said he would push to get talks moving again on Turkey's EU membership bid as the bloc searches for alternative energy routes after an energy dispute between Ukraine and Russia left many EU nations short of natural gas. One option is the Nabucco pipeline, which is being planned to bypass the feuding nations and carry Caspian natural gas through Turkey to Europe.

Erdogan said his country was ready to play a key role to help EU energy security. "Turkey is not coming to the EU to become a burden; we are coming to relieve some burdens off the shoulders of the European Union," he said.

The EU has suspended membership negotiations in 8 of 35 different policy areas, over Turkey's refusal to recognize Cyprus, an EU member, and to open its ports to the small island nation. Only 10, less important, files have been opened for negotiation.

Diplomats say Cyprus has been blocking the opening of talks in the energy area because of a dispute with Turkey over gas exploration at sea. Energy is one of the 35 areas, or so-called chapters, in Turkey's accession talks. Barroso told said that an issue as important as energy security should not be made conditional upon such a specific issue.

Link

Russia, Libya boost energy ties

Signalling a revival of Soviet-era strategic ties between Russia and Libya, Colonel Muammar Gaddafi said in Moscow on November 1 his country will enhance cooperation in the oil and gas sector with Russia, the word’s leading energy exporter. “We consider cooperation with Russia in the oil and gas sector as very timely at this moment ... Moreover, we have common approaches to the oil and gas policy,” Gaddafi said during talks with Russian President Dmitry Medvedev.

Gaddafi visited Moscow just two months after US Secretary of State Condoleezza Rice was his guest in Libya. During the Moscow visit, Gaddafi pitched a Bedouin tent in a Kremlin garden and invited Prime Minister Vladimir Putin for tea. Qadhafi’s Moscow visit came six months after then President Putin opened a new chapter in relations between Russia and Libya by becoming the first Kremlin leader to visit Tripoli. Russia’s energy giants, such as Gazprom, Tatneft, Tatneftegeofizika, LUKoil and Stroitransgaz are operating in Libya’s oil and gas sector. Their projects range from geological surveys, offshore exploration and development to oil refining and pipeline construction. In July, Gazprom offered to buy all of Libya’s natural gas production.

“We think alike about gas and oil policies,” Interfax quoted Gaddafi as saying. Gazprom head Alexei Miller and Libya’s National Oil Corporation chief Shukri Mohamed Ganem reached agreement to hold trilateral talks with Italy’s ENI later this month on joint projects, including a new major gas pipeline running under the Mediterranean from Libya to Europe. For now, Libya and Algeria compete with Russia to supply gas to southern Europe. Libya already supplies gas to Italy directly or through Tunisia. Meanwhile, Algeria’s Energy Ministry on November 3 confirmed that work on the undersea Medgaz pipeline between Spain and Algeria was already edging closer to completion.

The Russian authorities are also negotiating to provide Libya with a civilian nuclear research reactor and signed a framework agreement on nuclear cooperation. The civil nuclear pact signed by the nuclear energy chiefs of Russia and Libya provides for the construction of reactors in Libya and cooperation in medicine and nuclear waste disposal, Libyan Foreign Minister Abdelrahman Chalgham, who accompanied Qadhafi to Moscow, was quoted by the press as saying.

http://www.neurope.eu/articles/90512.php

Algeria tightens rules for foreign investment

Algeria plans to take a majority stake in any future investment project involving foreign capital, Prime Minister Ahmed Ouyahia said yesterday, outlining a measure which already applies to much of the oil and gas sector. "Regarding investment projects involving foreign capital Algeria intends to take a majority of the capital in accordance with its national interests and means," said a statement from the prime minister's office. It did not say when the measure would take effect nor did it define what types of investment the measure would apply to.

In the energy sector, state energy conglomerate Sonatrach has the right to a 51 per cent stake in any exploration and production and downstream activity. The north African country of 34 million is an important oil and gas supplier to Europe. Outside of the oil and gas sector, foreign investors at present can own a majority stake in their Algeria ventures. Until recently, some of these foreign investors could repatriate 100pc of their profits.

The main non-energy foreign investors are Egypt's Orascom Telecom, Orascom Construction Industries and Qatar Telecommunications.

Analysts said yestereday's statement appeared to be in line with comments made on July 26 by President Abdelaziz Bouteflika in which he attacked poor management of foreign investment and said he had been disappointed by its results. Speaking to local government officials, Bouteflika said weaknesses in the implementation of economic policy had allowed some foreign investors to profit at Algeria's expense and not reinvest earnings in the country.

Africa's second-largest country is struggling to reform a Soviet-style command economy dependent on oil and gas, dominated by loss-making state banks and blighted by red tape, corruption, inadequate access to credit and a weak private sector. Yesterday's statement marks a further tightening of the investment regime in Algeria following the imposition of a requirement on investors last month to reinvest locally a part of their profits to the value of any tax breaks they received. Starting this year, investors have four years in which to make the reinvestment, and those which do not comply will have to repay any tax breaks and be subject to a fine.

Guld-daily

Syria slashes gas oil subsidy, tripling price

The Syrian government more than tripled the price of gas oil on Saturday, kicking off a program to remove big subsidies on the fuel.

Pump owners said a liter of gas oil went up to the equivalent of 54 U.S. cents from 15 cents. The state imports large volumes of the fuel at around $1 liter.

Gas oil is used in Syria on a large scale for industry, transport and heating. The gas oil price increase came as the government announced a 25 percent hike in public sector salaries to help the population absorb rising living costs and the impact of subsidy cuts.

The increase, which will take effect this month, covers 2 million public workers and retirees, the state news agency said. Syria has a population of 18 million.
Reuters

Turkey to ease dependence on gas

Turkey opened a bid Monday for the construction of the country's first nuclear power plant, part of a plan to reduce the country's dependence on gas supplies from Iran and Russia. Turkey's electricity agency said in a written announcement that bids will be accepted until Sept. 24 for the planned plant in the Mediterranean port city of Mersin. The government assured potential investors that it would buy all the electricity produced by the plant for its first 15 years.

The plant is the first of three that the government of Prime Minister Recep Tayyip Erdogan plans to build by 2015 to meet the country's growing energy needs. Turkey has limited energy resources, relying on natural gas supplies from neighbors Iran and Russia.

Energy Minister Hilmi Guler has said that nuclear power is one of the best options Turkey has for increasing its energy security, and that nuclear power should supply 20 percent of the nation's needs within two decades.

Environmentalists have criticized the plan, raising security concerns and warning that the site is in an earthquake-prone area. Guler has said concerns over both issues would be taken into consideration in the plant's construction.

The Associated Press

Egypt starts controversial gas exports to Israel

Egypt has started exporting gas to Israel in accordance with a 2005 deal, an Israeli source told AFP on Monday, with the move set to irk the country's powerful Islamist opposition. "Egyptian gas has been flowing to Israel since last week but it has not yet been integrated into the Israeli network for procedural reasons," the source said, adding that the pipeline would be fully integrated "in a few days."

The new underwater pipeline runs 100 kilometres (63 miles) from the Egyptian Mediterranean city of El-Arish to the Israeli port of Ashkelon, supplying gas pumped from a gasfield in the north of the Sinai peninsula. The Egyptian side has remained virtually silent on its progress since a memorandum of understanding was signed in 2005.

The MOA provided for the export by an Egyptian-Israeli consortium, East Mediterranean Gas (EMG), of 1.7 billion cubic metres (60 billion cubic feet) of gas a year over 15 years for a total of 2.5 billion dollars.

AFP

Sonatrach declares not to be affected by EU energy plans

Algeria reiterated on Saturday it is not concerned by European Union's proposals to end the monopoly on its gas and electricity market, saying it aims to remain a major supplier to Europe.

The comments by Mohamed Meziane, Chief Executive Officer of state-owned energy firm Sonatrach, came a week after Energy and Mines Minister Chakib Khelil said the EU's plans would not affect his country's state-owned oil and gas firm.

"Until now, we see nothing indicating that the plans would affect Sonatrach. We need to wait and see the regulation which will be adopted," Meziane told state radio. "Sonatrach wants to be present in supplying the European gas market, which is our natural market," he added.

The European Union executive this month adopted proposals aimed at forcing big utilities such as Germany's E.ON and Electricite de France to separate power generation from their distribution networks.

The new rules will also bar foreign firms from controlling European energy networks unless they play by EU rules and their home country reaches an agreement with Brussels, Commission President Jose Manuel Barroso has said. Algeria is a major supplier of gas to Europe, particularly Spain, Italy and France. Its current output is estimated at 62 billion cubic metres per year, and is expected to reach 85 billion per year by 2015.

Reuters

Renewables despite 72.3 trillion cubic feet of gas reserves

Egypt natural gas reserves 72.3 trillion cubic feet

Egypt's confirmed reserves of natural gas reached 72.3 trillion cubic feet after increasing by 6.2 trillion cubic feet in the 2006-2007 fiscal year, Oil Minister Sameh Fahmy said on Monday, according to state news agency MENA. Fahmy also said that Egypt's confirmed crude oil and condensate reserves had risen to 3.97 billion barrels, MENA said. It added that Fahmy attributed the rise to increased exploration by global companies, more deep sea and Western desert exploration, and recent oil and gas finds.

Egypt, although a significant natural gas exporter, needs to develop renewable energy including wind generation if it is to power its growing domestic industries, a senior Egyptian official said on Monday.

Egypt has the potential for generating 20,000 MW of power from wind at sites on the Red Sea, Trade and Industry Minister Rachid Mohamed Rachid said during a visit to Madrid to seek foreign direct investment from Spain.

"We are concerned that, although we have reserves in terms of natural gas and oil, we all know that this has a limitation in terms of period," he told Reuters in an interview, although he added that the unpredictability of exploration results meant it was impossible to say how long reserves would last.

"At the same time, we are under the pressure of the growing demand of the industry in Egypt, so the renewable energy is a very important part of our energy equation at the moment," Rachid said.
"If we are able to generate more energy through renewable sources, whether it's wind or water or solar or nuclear, that means that we can also put our natural gas to better usage in the future," he said, explaining that gas also had other industrial uses apart from being burnt for power.
Foreign direct investment has risen sharply in Egypt since the government began an economic liberalisation programme, and should hit $10 billion this year, up from $2 billion three years ago, Rachid said.