The Arab Spring: Menas Associates;

20.04.11

Algeria's 'Perfect Storm'; Prof. Jeremy Keenan, 31.03.09 1

Our knowledge is your strength

Black Sea

Geopolitics: An

Overview

Alex Jackson

For

Menas Associates

» What is the Black Sea region? Described as a „bridge‟ between Europe, the

Mediterranean and the Caspian – but what does this mean?

» Littoral states are extremely varied in their orientation and regional identity.

Romania and Turkey, or Russia and Georgia, have very different concepts of

„where they belong‟

» So integration is limited and a regional identity is still developing: perhaps

the Black Sea should be seen as a transit corridor, but not as a unifying factor

or a defining source of common cultural identity. States look outwards, not

inwards

» Why does this matter? A lack of integration and different political visions

affects energy transit, resource cooperation, and wider geopolitical dynamic.

Won‟t affect investment but will affect the bigger picture.

DEFINING THE REGION

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» Bulgaria and Romania: EU states, have historical links to Russia and Turkey

but are anchored to the West

» Ukraine: Looking east or west? Divided between pro-Russian and pro-

European tendencies

» Russia: Its own geopolitical pole. Ambivalent relationship with Europe, seeks

to expand influence in Black Sea region as elsewhere

» Georgia: Aspires to Euro-Atlantic integration but held back by internal

problems, conflict with Russia, „enlargement fatigue‟

» Turkey: Undergoing a reorientation of its identity: European, Eurasian, Middle

Eastern, all three?

DIFFERENT POLES OF ATTRACTION

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» Military conflicts: May occur within the wider Black Sea region –

Armenia/Azerbaijan, internal conflict within Turkey, Russia/Georgia

» Access disruption: Bosphorus is the only non-river source of access to the Black

Sea. Closure of the Bosphorus for political, security, environmental or commercial

reasons would have significant impact

» ‘Soft’ security threats: smuggling, trafficking, environmental damage

» Border disputes: Could hinder transnational projects and the development of oil

and gas reserves

» Geopolitical tensions and ‘pipeline politics’: Great-power politics in the region

could affect regional states and their energy policies

» BUT no single „security complex‟ in the region

DEFINING THE RISKS

4

» Military conflict: Possible around the region‟s peripheries (Caucasus, Turkey,

Moldova, southern Russia) but with limited spillover elsewhere in the region

» Access disruption: Possible. Bosphorus is vulnerable to accidental or intentional

disruption. Increased oil and gas activity will cause greater delays, and will

complicate the picture, i.e. for LNG. New bypass canal could ease matters

» ‘Soft’ security threats: Unlikely. Smuggling and trafficking are seen as a threat

but the evidence and risk is low. Environmental damage is a risk but just requires

good practice

» Border disputes: Not a serious issue. Some minor disputes; only serious issue is

offshore Georgia/Abkhazia

» Geopolitical tensions and ‘pipeline politics’: can affect the broader

energy/political map and needs to be taken into account

QUANTIFYING THE RISKS

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» BSEC: 12 members (all littoral states, Albania, Armenia, Azerbaijan, Greece, Moldova,

Serbia); has focused on trade/development/culture/transport. No „high politics‟ function.

» GUAM: Georgia-Ukraine-Azerbaijan-Moldova. Has attempted to build alternative to pro-

Russian blocs in the wider region. Has worked to build a shared energy corridor – limited

activity so far. Not a viable geopolitical pole of attraction.

» Turkish-Russian relationship: keeping the balance? High-level political and trade

relationship, close energy ties across the Black Sea region. Long history of a „naval

balance‟; Russia has a strong stake in maintaining open transit through the Bosphorus.

» External factors:

› The EU – weakening Black Sea regionalism;

› US security / political presence – aggravates Russia and contributes to existing divisions

› Turkey‟s search for identity – reorientation elsewhere, or closer ties with Russia?

» Black Sea oil and gas development – promoting cooperation? Joint field development

and shared political/technical/environmental approach could deepen regional integration.

ISSUES AND DRIVERS – REGIONAL COOPERATION

6

» Dominant power in the wider region: strong historical influence in all Black Sea

states, relationship with Turkey has changed from conflict to cooperation

» Security presence through the Black Sea Fleet, role in Georgia‟s breakaway

enclave, range of military assets in the wider area

» Economic assets:

› Novorossiysk, main export point for Central Asian and Russian oil supplies

› Offshore drilling (Rosneft, ExxonMobil,

› Energy infrastructure: pipelines to Turkey, Ukraine, Bulgaria, Romania

» Political goals in the Black Sea Region rest on:

› Limiting US/NATO security presence

› Supporting Russian pipelines and energy projects

› Maintaining good relations with Turkey (among others)

ISSUES AND DRIVERS – THE ROLE OF RUSSIA

7

» South Stream

› Will it happen? Pushing ahead but questions

over timeframe, demand, source

› Impact on geopolitics: If built quickly would

limit/delay the growth of the Southern Corridor,

strengthen Russia‟s presence in the Black Sea

region, slow down Caspian gas developments

» AGRI and White Stream › Will they happen? Both plausible in the medium

term but reflect secondary priorities – limited size,

limited impact

› Impact on geopolitics: Light. Alternative

supply sources for Ukraine/Romania, and

alternative export links for Azerbaijan but

would not fundamentally change the gas

picture. Difference between BTC and Baku-

Supsa pipelines.

» Impact of the Southern Corridor?

ISSUES AND DRIVERS – ENERGY TRANSIT

8

ISSUES AND DRIVERS – THE BOSPHORUS

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» Passage governed by the Montreux Convention of 1936: allows free civilian access,

limits military access. Strategic issue for Russia

» Environmental concerns and traffic (one oil tanker „every 53 minutes‟) increasingly

delay transit. Costs oil companies $1.4 billion a year

» 2011 - PM Recep Tayyip Erdoğan proposes a “crazy project” of a canal west of

Istanbul to cut traffic. Would cost at least $12 billion and take several years

» Would facilitate tanker traffic and encourage growth of Black Sea oil industry

» Regional integration will be a challenge: with competing identities, geopolitical

poles of attraction, political cultures, and security situations - building a shared

approach will be difficult

» Access to the Black Sea will become an increasing factor for IOCs and littoral

states. New solutions may have to be found (pipelines; canal; new legal regime at

the Bosphorus)

» External factors will continue to influence the Black Sea region: EU‟s crisis,

Turkey‟s political orientation, Caucasus security, Eurasian gas politics will all affect

the littoral states

» An ‘energy rush’ could change the picture: Big finds could change the region‟s

economic, political and geopolitical makeup in the next ten-twenty years

» Look to the long term

TOWARDS THE FUTURE

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CONTINUITY OR CHANGE?

11

The Arab Spring: Menas Associates;

20.04.11

12 Iraq: and now? 12

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