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Speech at the 10th Steering Committee of the Black Sea Regional Centre

 

Athens, 21 May 1999


Ladies and Gentlemen,

It is my pleasure to be present at this tenth Steering Committee of the Black Sea Regional Energy Centre. And, I am also pleased that today's meeting takes place, at the kind invitation of Minister Venizelos, in my home country. I am also pleased to greet Mr. Mendilcioglu from Turkey, in his new capacity as Chairman of the Steering Committee. I wish him a great success, and that he can build on the considerable work already accomplished by Mr. Misiulin of Russia.

The Commission is implementing an important policy in promoting energy co-operation with, and within, the partner countries of the Union in Eastern, and South-Eastern Europe. One of the first manifestations of this was the establishment of the Black Sea Regional Energy Centre as a forum for such co-operation.

Over the last few years the Centre has developed and flourished. It has carried out a large number of projects, many of those financed by the Commission, and has managed to establish itself as a trusted partner of governments, international organisations, and the energy industry. I would like to assure you of my support, and of the support of the European Commission, for the work of the Centre and the work that you, as the Steering Committee of the Centre, are carrying out.

Of course you all remember the work that the Centre carried out in organising, with the Commission and the Romanian Ministry of Industry and Trade, the Ministerial Conference in Bucharest in November 1997. The Conference was instrumental in bringing energy co-operation to a new level in this region, and has been the starting point of a number of new initiatives. I would like, therefore, to pay homage and give thanks to the Centre's Director, Dr. Radulov, and all the Centre's staff.

Ladies and Gentlemen,

Of course it is difficult, when considering energy co-operation in this region to forget the military campaign taking place a few hundred kilometres from here. I believe that the time has come to give peace a chance. We all hope that a political settlement will soon be achieved, which will ensure a lasting peace for our people and our region. And, this can be ensured by respecting existing borders and international law, and by respecting human rights. Furthermore, to achieve peace and stability in our region, a complete programme of economic reconstruction and development is needed, together with the reinforcement of political and economic co-operation.

The European Union is already beginning to plan for the post-conflict era, and this planning is taking place together with our partners in the international community. From the Union's point of view, this reconstruction plan will have a number of different aspects.

The Union will, firstly, be considering a new level of political relations with many of the countries in the region. They will be invited to negotiate a new generation of agreements with the Union which will place our relations on a new footing. I believe we should also support the reconstruction of the Federal Republic of Yugoslavia. We cannot afford the maintenance of a black hole in the middle of the Balkans. This would only mean a permanent threat to the stability, the development and the well being of the whole region.

Secondly, we are currently putting together a new international package of assistance, which will very much concentrate on the principle of regional co-operation. In this framework, the work which we have been promoting, as regards regional energy co-operation, will come into its own.

As you know, in 1996 we established a special Task Force, financed by SYNERGY, to ensure the efficiency and co-ordination of electricity, oil and gas interconnection investment initiatives in the Balkan region.

This Task Force has resulted in the adoption, at the Bucharest Conference, of a Memorandum which lists the priority energy interconnections in this region. As a follow-up to this, a new project, also financed by the SYNERGY programme, entitled 'Energy Interconnections in South-Eastern Europe' has been running for a number of months now. This project aims to promote investment in the priority interconnections which have received political endorsement.

I am confident that this project will continue to promote interest in the investment possibilities that the priority energy interconnections can offer. From what I have been informed by the investment workshops so far, this is certainly already the case, with a number of potential investors, both private and institutional, expressing their interest.

In parallel to this, you may remember also that the Task Force memorandum identified a number of important issues, which had hitherto been considered only nationally. It was recognised that they should be considered in a regional context in any follow-up activities linked to the work of the Task Force.

A first issue was the need to integrate national electricity markets. For this action, a 'Study on the development of a competitive Balkan Electricity Market' has been funded from the PHARE multi-country energy programme. The main objective of the project is to assist in the development of a regional electricity market in the Balkan Region operating under UCPTE standards.

I place great importance on this project, and I am joined in this feeling by many investors. You all realise the increased efficiency of electricity networks: studies have shown that the establishment of the UCPTE result in a 10% economy of generation capacity in the member zone.

I have great hopes that this PHARE project will be the beginning of the development of this regional and competitive electricity market.

Another issue which was raised at the Bucharest Conference concerns the impact of energy projects on the Black Sea and Mediterranean Sea. I am therefore pleased to inform you that a Ministerial-level Conference will be organised on this theme later in the year. At the kind invitation of the Greek Minister of Development, this Conference will be held in Athens.

I would like this Conference to gather decision makers on Energy and other relevant issues (such as the environment or transport) from the countries of the Black Sea, South-Eastern Europe and the Mediterranean, to promote co-operation within the framework of energy interconnections and large oil and gas transportation projects. It will formulate the principles and measures to eliminate environmental risks, and to promote environmental safety that will govern all large energy projects in the region.

The background for this is the increased transport of hydrocarbons from Central Asia and the Caucasus. Since their independence, the development of these countries' energy sectors has entailed the expansion of their oil and gas export potential, particularly westwards to Central Europe and the European Union.

As a result of this, a number of new pipeline projects are envisaged. The Community favours a policy of multiple routes being promoted by the market on purely commercial criteria. Furthermore, we place great importance on reconciling the necessary energy projects with the imperative respect for the environment.

We are also considering using the occasion of this Conference to present the results of the two other important projects in the region that I already mentioned – the SYNERGY project "Energy Interconnections in South-Eastern Europe", and the PHARE project "Study on the Development of a Competitive Regional Electricity Market in the Balkans". This will very much depend on the progress of these projects.

We will keep you fully informed of the developments as regards the organisation of this Conference. I trust that we will be able to count upon your co-operation, as there will be a number of preparatory workshops to consider some of the important issues of the Conference.

Of course, given its expertise, the Black Sea Regional Energy Centre will also be very much involved in the preparation.

Ladies and Gentlemen,

All the work that we are carrying out to promote energy co-operation, both between the Union and the Black Sea/Southeast European region and within this region, is the result of our shared interest. I don't think that I need to convince you of the benefits that you can gain from such co-operation, but I would like to mention the importance that this co-operation has for the European Union.

The European Union already has a 50% dependency on outside energy supplies. We know that this will only increase: forecasts estimate that it will rise to 70% by 2020 – particularly given the increased use of natural gas inside the Union. Much of this energy, and an increasing proportion of it, will come from the former Soviet Union – whether Russian oil and gas, Caspian oil or Central Asian gas.

This will have to transit through South-eastern Europe to arrive in the Union. Part of this energy will also stay in this region: I am aware that most of your countries have a very high dependency on outside supplies for much of their primary energy.

That said, the economic and political transformation of the countries of South-Eastern Europe has changed the zone's role between energy producing and energy consuming regions. South-Eastern Europe is also an energy-consuming region in which consumption is likely to rise in the future. Its role as an energy transit region will therefore increase. We will all benefit by promoting increased energy co-operation. Energy co-operation is an important framework for the promotion of development, social progress and the wellbeing of all our people.

Ladies and Gentlemen,

This region is vital to our common future. I am pleased that the Black Sea Regional Energy Centre has played so important a role in promoting energy co-operation. And therefore, I am glad that this year the Centre will be beginning a new project to be funded by the SYNERGY programme.

But, this Centre is not the personal possession of the European Commission, nor of any one country. On the contrary, its true value is that it is the manifestation of all of our countries. This multi-national character is shown by the fact that the Centre has a Steering Committee composed of representatives from each country. When our Centre receives a strong input from its constituent countries is when it works best. So, I would like to thank you for your continued support and involvement in the Centre's activities. But, I would also like to ask you to consider how this involvement can be strengthened and deepened. You might consider, for instance, the possibility of sending staff from your Ministries to work at the Centre for short periods, therefore strengthening the bridges between national energy policies and regional co-operation.

With these thoughts in mind, I wish you all a successful and stimulating meeting, and I thank you for your attention.