Press Release

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Palais des Nations, Geneva
28 June 2005

Geneva, 28 June 2005 - The Caspian Sea region may be one of the few options left to policy makers seeking to ensure the energy security of UNECE member countries. The Caspian Sea region is very rich in oil and natural gas but production and exports only account for 2 per cent of world production now. The region has a very large potential for increasing exports given adequate investments and export agreements. To address this problem, the UNECE Energy Security Forum has decided to hold in Geneva, on 28 June 2005, a High-level Meeting on Energy Security in the Caspian Sea Region to consider the role of this region in enhancing global energy security.

Policy makers in the Caspian Sea region are acutely aware of the strategic importance to these energy resources. This is why the meeting will begin with a presentation of Mr. Igor Yusufov, Special Envoy of President Vladimir Putin on International Energy Cooperation, Russian Federation; Mr. Vladimir Shkolnik, Minister of Energy and Mineral Resources, Kazakhstan; and Mr. Zaur Yaqubov, Special Advisor to the Minister of Fuel and Energy, Azerbaijan among other senior speakers.

Traditional energy security policy measures of increasing indigenous fuel production, improving energy efficiency and building up strategic reserves are unlikely to provide an adequate response to these emerging energy security risks.

The confluence of new global energy security risks together with rising energy demand in UNECE countries will leave the many UNECE countries genuinely more vulnerable than they have been in the past. The sober economic and strategic facts are that rising energy demand will lead to an increasing energy import dependence of the UNECE region, especially for oil and natural gas.

Western European oil imports could rise from 55 per cent of consumption now to 65 per cent in 2010 and possibly to 80 per cent by 2020.

North American oil import dependence could rise from 35 per cent to 45 per cent by 2020. Apart from the Russian Federation, central and eastern European oil imports could rise from 80 per cent today to 90 per cent in 2020.

Western European natural gas imports are expected to rise from 35 per cent of consumption now to 45 per cent in 2010. United States liquefied natural gas (LNG) imports are likely to continue rising.

Apart from the Russian Federation, central and eastern European gas import dependence is likely to increase from 65 per cent in 2010 to 85 per cent in 2015.

At the same time, the cost of developing incremental sources of energy supplies is increasing. And some key oil and gas producing countries have a poor investment climate.

The diversification energy supply sources may be the key to accommodating rising energy demand, rising import dependence and reducing risk of energy supply disruptions. Indeed, the international cooperation between energy importing and exporting countries needed to accomplish this may be the best way, possibly the only way to ensure a stable global economy and the peaceful relations this can engender.

In order to accomplish this, investments in new oil energy production will be needed. Enhanced energy transport facilities and new transport corridors will be required. The enhanced energy trade needed to diversify further the sources of UNECE member States energy supplies will require a suitable investment climate, commercial agreements and political consensus that international cooperation between importing and exporting countries can promote.

UNECE member States have a strategic interest in encouraging the investments needed to increase energy production and develop export agreements. At the same time, the countries of the Caspian Sea Region have a strategic interest in establishing and maintaining a suitable investment environment.

As a result of the session, participating governments of the countries surrounding the Caspian Sea could agree to work together and with other UNECE member States on increasing energy production and energy exports while enhancing the environmental quality of the region.

For further information about the Energy Security Forum and the High-level Meeting, please consult the UNECE website http://www.unece.org/ie or contact:

Mr. Alexandre Chachine
Industrial Restructuring, Energy and Enterprise Development Division
United Nations Economic Commission for Europe
Palais des Nations, Bureau 380
CH - 1211 Geneva 10, Switzerland

Phone: + 41(0)22 917 2451
Telefax: + 41(0)22 917 0038
E-mail: [email protected]

Ref: ECE/IREEDD/05/P06