March 25, 2023

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Which are the most vulnerable and least affected countries in Europe in terms of the energy crisis

The energy crisis is creating a new European order, with a strong Italy and a troubled Germany, according to an analysis published by Reuters, cited by the News.

According to her, the good relations of the authorities in Rome and Italian companies with African states and the diversification of suppliers give them an advantage in gas supply.

In the weeks following Russia’s February 24 invasion of Ukraine, Claudio Descalzi, CEO of Italian energy group Eni, began a series of visits to gas suppliers in Africa.

Where did the Italians go to get extra energy

The visits included meetings with officials in Algeria in February and talks in Angola, Egypt and the Republic of Congo in March, with Descalzi often accompanied by senior officials in Rome, according to company and government statements.

Italy and Eni, in which the Italian state has a controlling stake, have been able to take advantage of existing supply relationships with those nations to secure additional gas to replace much of the volumes previously received from the gas supplier. top of the country, Russia.

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It’s a rapid change that many European countries have failed to make as Vladimir Putin’s war pushes the continent into an alternate reality.

Germany prepares for gas and energy rationing

Instead, Germany, an economic powerhouse and a reference model for prudent planning, was caught completely unprepared. It is on the brink of recession, its industry is preparing for gas and power rationalization, and it has just nationalized a major utility company.

Italy, a country familiar with economic crises, seems relatively resilient. It has secured extra supply and is confident it won’t have to ration gas, with its government hailing the nation as “the best in Europe” when it comes to energy security.

“The appreciation that Descalzi enjoys in several African countries is certainly a competitive advantage,” said Alberto Clò, former Italian Industry Minister and former Eni board member, referring to the difficulties of signing agreements in during a supply crunch.

Which are the most vulnerable and least affected countries in Europe in terms of the energy crisis

A large part of Europe is facing a winter supply crisis, with Germany, Hungary and Austria the most exposed.

Countries less affected include France, Sweden and the UK, which have not traditionally relied on Russia, as well as Italy.

Martijn Murphy, an oil and gas specialist at research firm Wood Mackenzie, said that while Italy had long regarded Russia as its biggest gas supplier, its greater diversity of suppliers and long-standing ties to Africa meant that it is better placed to withstand the cessation of supply from Russia than many other countries.

“Eni has very close ties with all the countries it operates with in North Africa and is present in all of them: Algeria, Tunisia, Libya, Egypt and in most of these countries it is the largest upstream investor and international producer of oil companies,” said Murphy.

The Italian government declined to comment. Germany’s economy ministry has said it wants to move away from Russian gas imports as quickly as possible and diversify its supply, citing initial steps in that direction, such as leasing five floating liquefied natural gas (LNG) terminals. Germany currently has no LNG terminals, while Italy has three in operation and recently bought two more.

Italy replaces 10.5 billion cubic meters of Russian gas

Italy consumed 29 billion cubic meters (bcm) of Russian gas last year, representing approximately 40% of its imports. The country is gradually replacing about 10.5 billion cubic meters of this amount with increased imports from other countries, starting this winter, according to Eni.

Germany, whose 58 billion cubic meters of imported Russian gas last year accounted for 58% of consumption, has seen supplies through the Nord Stream 1 pipeline reduced since June and stopped in August.

Unable to secure sufficient long-term replacement supplies from other countries and lacking a national oil and gas company with production abroad, Germany was forced to go to the spot market, where it had to pay about eight times the prices from last year.

Germany does not enjoy Italy’s proximity to North Africa, for example, or the North Sea riches of Great Britain and Norway. It has no major oil or gas reserves.

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