South Stream Project Analysis

The South Stream project is designed by Gazprom and ENI; two large companies in the industry of oil and energy. As a result in the following essay, the South Stream project and its impact on the economic development for the South Eastern Europe will be discussed and critically evaluated. Hence, the geographical and political developments regarding the South East Europe will be provided for better understanding the impact of South Stream. Additionally, the impact of economic development of the South Eastern Europe is to be further discussed regarding the European dependency on Russian gas and the Russian gas exports towards Europe. Moreover, the European Union policies and strategies to maintain a diverse supply for means of energy and how
The propositions provided by the 2030 Framework are regarding the increase of indigenous energy sources via renewable energy projects and the reduction of energy consumption by developing energy efficiency. Moreover, the framework aims to diversify the energy imports, to increase the share of indigenous energy consumed also to establish smart grids and interconnections between the member states. Consequently, the decrease on dependencies for energy resources would create competitive, secure and sustainable energy which would have an impact on the state’s economy development as a result of decreasing the dependency on means of energy by opening new opportunities to produce energy and to create energy efficiency in most dependent countries; in this case South Eastern Europe (EUROPEAN COMMISSION,
Many experts advocate that the South Stream is the only option for the South Eastern countries of Europe to have a sustainable gas supply which would meet the domestic energy demand. Moreover, this theory is endorsed further by advocating the fact that this project will create new opportunities and it will reduce the power of Russia on controlling the gas supply for Europe, will create security of supply and will meet the 20-20-20 targets by the EU (renewable energy share in consumption to increase to 20% and the reduction of carbon emission by 20% by the year 2020) (Gazprom.com, 2014), (Rey, n.d.). However, the project structure of South Stream project in general according to the project website, will be consisted four oil companies as shareholders: Gazprom (50%), ENI (20%), and Wintershall Holding (15%). Furthermore, the onshore section will be partnered with: OMV (Austria), Bulgarian Energy holding (Bulgaria), Plinacro (Croatia), DESFA (Greece), Magyar Villamos Művek (Hungary), Srbijagas (Serbia), and Plinovodi (Slovenia). Surprisingly for some, the onshore section in every state will be in a 50-50 partnership with Gazprom, excluding Serbia where Gazprom will own 51% of the shares (Gazprom.com, 2014).As a result of this, the hypothesis regarding that the South Stream will have a positive impact in the involving countries