Tuesday

16th Jul 2019

EU moots greater role in deals with oil-rich countries

The European Commission on Wednesday suggested it should negotiate 'strategic' energy contracts with other countries on behalf of the whole EU and have a greater say when countries strike bilateral deals with Russia.

"If we speak on one voice, we get a completely different weight, so that the divide-and-rule principle will no longer be successful for other countries," EU energy commissioner Guenther Oettinger said during a press briefing outlining the proposal.

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  • The EU imports 80 percent of its oil (Photo: Paul Lowry)

Pending approval by member states and the European Parliament, the external energy policy draft would require all EU member states to provide information on existing and negotiating agreements in all areas, not only oil and gas.

This would apply to private companies as well, so long as they are part of an inter-governmental agreement - for instance BP bidding for a gas exploitation in Russia.

The commission would have an "observer-adviser status in the negotiation process" and respect confidentiality rules towards other member states if needed, he explained.

Currently, EU states have to notify the commission only after they concluded gas supply agreements with other countries, including Russia which is the biggest exporter to the EU.

Presenting it as advantageous for Moscow as well, since it would avoid painful court cases for breaches of EU competition law, Oettinger noted that Poland had already approached his services for advice and legal expertise during negotiations on the Yamal gas pipeline from Russia.

"This doesn't mean the European Commission will be at the negotiation table in all negotiations or reviewing all existing agreements - that would be overly bureaucratic. But when it's about the security of supply and could jeopardise open competition in the internal market - there we want to be active, offer legal opinion early in the proceedings," he said.

The proposal would also allow the EU to strike deals for instance with Tunisia, Egypt or Libya not only to secure oil supplies, but also to provide solar energy.

Democracy

The democratic credentials of the supplier countries will not be a factor when the EU strikes deals.

"I don't think we can require higher ethical rules than we can actually expect. If we say we're going to treat only with countries which are full democracies, we may as well just park our car in the garage," Oettinger quipped.

But he insisted that "energy can help bring about structural change, more democracy, market economy and human rights." Current events, however, have proven the contrary. In oil-rich Libya, a 42-year-long dictatorship based on revenues from this fossil fuel is now coming to an end after six months of fighting and Nato airstrikes.

"It's true across the whole raw materials sector, particularly in the case of gas and oil, most countries we get these products from don't have the same degree of democracy or market economy and respect for the rule of law we're familiar with. Take China, need I say more?" the German politician admitted.

He suggested that a democratically elected post-Gaddafi government should focus not only on oil revenues, but also solar power and energy efficiency.

Commenting on the draft bill, European Parliament chief Jerzy Buzek, said an energy market was "just as important" as creating the single market in 1992.

He singled out the requirement to exchange information about bilateral deals as a "step towards joint purchasing" and said that the EU negotiating deals for large infrastructure projects will become "ever more necessary."

Centre-right Polish MEP Jacek Saryusz-Wolski told this website that the initiative improves current rules on how to strike energy deals with other countries.

"We need information on the structure of energy relations of the member states with third countries in order to develop a comprehensive energy diplomacy," he said.

Others were more critical. British Conservative MEP Giles Chichester, who specialises in energy issues, slammed it as "the worst kind of meddling," voicing concern over confidentiality and commercial rules.

"Our energy arrangements are Britain's own business, not the commission's. This is an attempt to control and interfere with our individual trading interests on a new and deeply worrying scale. The commission is up to its old empire-building tricks," he said.

Opinion

Oil and gas companies tarnish EU reputation

EU governments are failing people in resource rich countries by not enforcing strong anti-corruption measures on European multinational companies, writes Jana Mittermaier from Transparency International.

Brussels tells states and companies to use less energy

The European Commission has adopted a 'wait and see' approach over whether to remove surplus carbon credits arising from gains in energy efficiency, from the EU's emissions trading scheme. The question of binding energy efficiency targets was also kicked into touch.

MEPs call for EU to clean up oil, mining industries

The European Parliament has urged EU countries to clean up the mining and oil industries by publishing what companies pay to get their hands on contracts and by giving legal protection to whistleblowers.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

EU banks more vulnerable to shocks than feared

Eurozone banks, such as Deutsche Bank, might be much more vulnerable to a repeat of the 2008 financial crisis than EU "stress-tests" have said, according to a new audit.

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