China and Europe’s Energy Security in Sub-Saharan Africa: similarities and challenges

9 
INTRODUCTION 
 
What does energy security mean? 
 
 
The International Energy Agency (IEA) definition of energy security is: “the 
uninterrupted availability of energy sources at affordable price”. In the short-term it 
means the ability to respond promptly to abrupt energy supply disruptions; while in the 
long-term it means encouraging and improving diversification both of energy types and 
supply sources.
1
 Moreover, United Nation Development Programme (UNDP) claims 
that “Ensuring energy security will require diversification of types and sources of 
energy, with increasing focus on consumer needs, on indigenous energy supplies, 
energy efficiency and regional interconnections”.
2
 The variety of the energy mix is 
important to reduce the dependency on fossil fuels and on oil and gas imports. Hence, 
investments in new technologies development and in renewable energies address both 
climate change and energy security issues. The bond between climate change, energy 
security and development is tightening up, having interlinked goals – like encouraging 
the usage of renewable energies aiming both in reducing greenhouse gases (GHG) 
emissions and diversify the energy mix. Notwithstanding how important is the impact 
of renewable energies on countries’ own energy security, their capacity to entirely 
replace fossil fuels is still a mere ambition.
3
 The shares of renewable energy sources 
(RES) in European Union (EU) and China are increasing, contributing to diversify the 
                                                
1
 International Energy Agency, Energy Supply Security: Emergency Response of IEA Countries, IEA, 
2014. 
2
 United Nations Development Programme, Sustainable Energy, 
http://www.undp.org/content/undp/en/home/ourwork/environmentandenergy/focus_areas/sustainable-
energy.html . 
3
 European Commission, Green Paper: EU development policy in support of inclusive growth and 
sustainable development, Brussels, 2010.
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types of energy exploited, but in the forthcoming years – both in the short and long term 
– the employment of import resources like crude oil and natural gas will remain 
dominant. Therefore, sustainable development and climate change will be issues not 
faced in this dissertation.  
We have also to take into account that the meaning of ensuring energy security differs 
from country to country. Economies highly dependent on imports of oil and gas are 
concerned about supply; on the contrary, exporting countries focus on the stability of 
demand. To address both these problems, critical factors are durability of supply and 
diversification of sources. The latter is of utmost importance because it deeply affects 
prices. If there are several sellers, there is high probability that the price will remain 
stable.
4
 Diversification of energy sources became a fundamental matter of national 
strategy since the eve of World War I, when First Lord of the Admiralty Winston 
Churchill decided to rely on oil from Persia as the main power source of the British 
navy’s ships. Nowadays the famous sentence said by Churchill still remains valid: 
“Safety and certainty in oil lie in variety and variety alone”. After one century nothing 
changed and still diversification of supply is the main tool to ensure energy security. It 
stabilizes the markets and provides alternatives in case of disruption, addressing both 
producers and consumers prime concerns. Accordingly, in order to implement energy 
security also resilience, high-quality information and the acknowledgement of the 
globalization of the energy security system – in particular regarding China and India 
energy needs for their growth – are complementing key principles.
5
  
The IEA’s Model of Short-term Energy Security (MOSES) defines – external – 
resilience as: the “ability to respond to disruption of energy imports by substituting with 
other supplier or supply routes”. For crude oil, oil products, natural gas (also LNG) and 
coal the principal indicators of resilience are the entry points (ports and pipelines) and 
the diversity of suppliers; while the main risks concern the net-import dependency and 
the political stability of suppliers. The physical security of supply to face sudden 
disruptions is more relevant in the short-term, while in the long-term other 
aforementioned notions, like rapidly growing demand, affordability and volatility of 
                                                
4
 Oil&Gas Journal, Defining Energy Security, http://www.ogj.com/articles/print/vol-110/issue-1c/regular-
features/journally-speaking/defining-energy-security.html . 
5
 Daniel Yergin, Ensuring Energy Security, Foreign Affairs, Vol. 85, No. 2 (Mar. - Apr., 2006), pp. 69-
77.
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energy prices, have to be taken into consideration.
6
  According to these facts the main 
goal of my thesis – concerning both the short and the long term – will be how to deal 
with import dependency and ensuring diversification of supply as the main tools to 
maintain stable prices and markets. Moreover, I want to underline that “security of 
supply does not seek to maximize energy self-sufficiency or to minimize dependence, but 
aims to reduce the risks linked to such dependence”.
7
 
 
The first chapter will outline European energy dependency and the main threats to 
European energy security. One of the main challenges when dealing with security issues 
is to get an overarching approach, concerning also the background of the current 
situation.  Furthermore, I wanted to provide data on the shares of energy import 
dependency in order to demonstrate in a geopolitical context that the diversification of 
energy sources is nowadays even more crucial than in the past to improve European 
energy security. When I started to address the topic, I felt the need to get the whole 
picture on the confrontation between EU and China’s companies in Africa in order to 
avoid uncertain and random conclusions. For this reason, it is necessary to take a look at 
the domestic policy in each country, especially in China because of the government 
direct influence over Chinese companies behavior at home as well as abroad. The 
second chapter will then attempt to explain how Chinese energy industry works and 
how China Development Bank (CDB) and China EximBank are able to give financial 
support to Chinese National Oil Companies (NOC) activities overseas. The chapter will 
also analyze the relation between the NOCs behavior at home and abroad and what kind 
of influence Chinese NOCs have in Africa. Given the lack of transparency and the 
rising economy in China, it is fundamental to comprehend which tools are at disposal of 
Chinese NOCs and how they use them. 
Finally, the last chapter will regard EU and China’s relations with Sub-Saharan African 
main oil and gas suppliers, trying to show what are the challenges the two parties have 
to face in each African country in order to expand their influence and economic power 
and what are, instead, the opportunities for cooperation. 
                                                
6
 International Energy Agency, Measuring Short-term Energy Security, IEA, 2011. 
7
 European Commission, Green Paper: Towards a European strategy for the security of energy supply, 
Brussels, 2000.
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Chapter 1  
EUROPE’S ENERGY SECURITY POLICY 
 
1.1 Europe’s imports dependency and Common foreign energy policy 
Europe energy imports dependency 
 
Source: European Commission, EU Energy in figures, Brussels, 2013. 
 
Since 1995 EU import dependency rose continuously – except after the 2008 
financial crisis – till 2011. British Petroleum’s (BP) 2035 forecasts show that oil and 
coal imports will decline respectively by 23% and 45%, but EU’s gas import 
dependency will reach 84%. Taking into account the future falls in both the overall 
European consumption (6%) and production (5%), EU’s total import dependency 
should remain at a plateau of 55%. In addition, it is expected that China will overtake 
Europe as the world’s largest energy importer by 2030 and also its energy demand per 
capita will be higher than in EU.
8
 According to this data it is easily understandable why 
“Energy Security is the key policy agenda of both China and EU in the twenty-first 
century”.
9
 
                                                
8
 BP, Energy Outlook 2035: EU, http://www.bp.com/content/dam/bp/pdf/Energy-economics/Energy-
Outlook/Regional_insights_European_Union_2035.pdf . 
9
 Mehdi P. Amineh, Yang Guang, Secure Oil and Alternative Energy: The Geopolitics of Energy Paths of 
China and European Union, Boston, Brill, 2012, p. 1.
13 
 
The EU’s strategy to ensure energy security differs substantially from China’s 
energy policy. The European approach towards energy security is led by a strong 
liberalization of the sector, free markets and EU member national interests. This is in 
stark contrast to the Chinese System. In Europe the politicization of energy management 
on a common level is still developing and not yet achieved. In fact, despite the need of a 
more unified “common voice” in order to strengthen EU External Energy Policy, each 
member states national interest continue to prevail. Undoubtedly, “speaking with one 
voice” will help Europe gain major bargaining and economic power to strengthen ties 
with producing countries and to develop more convenient partnerships. Anyway, the 
clashing of European countries’ own energy policy objectives makes a common 
approach in energy matters hard to achieve.  Firstly, the European Union has to develop 
a common internal energy market: in order to get credibility, an integrated and united 
energy market for gas and electricity is needed. Otherwise, each country will continue 
to conclude bilateral deals, caring only for their own energy interests and minimizing 
the importance of a common security policy of supply. Secondly, Europe’s market 
approach towards third countries has to be reconsidered, because most of non-EU 
countries regard it as a “top-down” attitude. Finally, Europe has to plan accurately how 
to support its Energy Security Policy since it has to take into consideration that over 
90% of fossil fuels are located in non-democratic countries and often also in unstable 
ones.
10
 Hence, a politicization of European security creating a common energy market 
and a “common voice” will surely not be fast and easy to achieve. The “energy aquis 
communautaire” towards unity and more integration will be a long process involving 
every member state, having to deal with a mitigation of each country national interest. 
 
Since 2006, the EU addressed the above-mentioned issues focusing on six key 
areas: competitiveness and internal energy market, diversification of the energy mix, 
solidarity, sustainable development, innovation and technology and external policy. In 
order to tackle these problems the European Commission (EC) planned to further 
enforce its open markets method: stimulating competition between companies to make 
                                                
10
 Arianna Checchi, Arno Behrens, Christian Egenhofer, Long-term Energy Security Risks for Europe: A 
Sector Specific Approach, CEPS no. 309, January 2009, p. 39-40.
14 
them become European-wide competitors. Merging the several European gas and 
electricity markets, the EU will lower end-users and industrial energy prices, enhance 
security of supply and increase competitiveness. In order to improve the security of 
supply in a liberalized market, the EU has also to augment transparency and 
predictability while harmonizing rules to access to a single European grid for gas and 
electricity. This will boost the European Foreign Energy Policy, helping to develop a 
coherent common external policy that will be able to play a more effective international 
role. Hence, diversifying the energy supplies remains always a priority area especially 
concerning gas and oil imports. Therefore, further development of the EU-Africa 
partnership will have a key role in the future diversification of energy imports.
11
  
 
Crude Oil Imports by Region in European Union (EU27) 
Region % of total 
oil imports, 
2001* 
% of total 
oil imports, 
2005 
% of total 
oil imports, 
2008 
% of total 
oil imports, 
2011 
% of total 
oil imports, 
2013 
Middle 
East 
24.98% 21.59% 17.83% 19.47% 13.65% 
Africa 19.78% 19.38% 23.23% 18.40% 25.47% 
Asia 0.11% 0.08% 0.07% 0.08% 0.01% 
FSU 18.76% 38.40% 38.41% 43.54% 42.02% 
Europe 32.96% 17.37% 16.99% 15.11% 13.97% 
America 3.33% 3.19% 3.48% 3.40% 4.88% 
World 
Volume 
(1000 bbl) 
 
3 918 882 
 
4 510 392 
 
4 441 852 
 
3 868 887 
 
3 570 619 
* This data includes intra-EU plus extra-EU imports considering also United Kingdom and Denmark’s 
shares. Source: European Commission, Registration of Crude Oil Imports and Deliveries in European 
Union (EU27), 2001 – 2013. 
 
 
 
As the above chart shows, crude oil imports from the European Economic Area 
– most of them from Norway – decreased significantly over the last decade. In addition, 
taking into consideration that since 2005 the United Kingdom became a net crude oil 
                                                
11
 European Commission, Green Paper: A European Strategy for Sustainable, Competitive and Secure 
Energy, Brussels, 2006.