Abstract

Fossil energy supply, particularly Oil & Gas, has become a subject of vulnerabilities since first oil shock and especially after experience of high oil prices before credit crunch by the end of 2008. Many analyses have been done on the growing rate of energy consumption and on energy import dependency of many industrialized states like as U.S. & EU countries. Growth on consumption, changes and integration of markets as well as expansion policies within the European Union (EU) influence effectiveness of the approaches and tools to provide EU with secure & sufficient supply of energy.

An overview of different approaches and policies taken by western countries shows that two main approaches are used to control and somehow guarantee energy security of supply which are:

  1. Market and Institutional (M&I) approach in which Market and Energy Institutes are responsible to regulate the market

  2. Regions & Empire (R&E) approach in which consumer and producing countries build up direct or semi-direct relationships to create energy blocks

Failure of M&I approaches in different historical events to secure energy supply beside basic changes in shape and positioning of NOCs & IOCs in the market are hints which bring in mind the fact that second approaches could be a better choice for EU in the future and specially in case of Gas & LNG supply which is not yet organized by unified institutes or organizations in the market. Efficiency of this way is closely linked to the efficiency of international relationships with producer countries. Thus it is important to specify positive consequences of R&E approach as well as negative results of failure to use this method on energy security of EU for the next decades

In this research ownership situation of European oil and gas companies in main energy blocks (Persian Gulf, Russia, Africa) under current M&I approach is described and then effects of strategic bilateral agreement on future energy security of supply for the EU is discussed .Case study of Iran energy resources is used to demonstrate consequence of a real future option of EU, (particularly to consume future LNG production of Iran). Finally some recommendations are proposed.

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