An Economic Anaysis of The Impact of EU Accession Upon Crude Oil and Oil Production Policy in Lithuania

Abstract

This thesis presents a two-stage economic and policy analysis of the impact of European Union (EU) accession upon crude oil production and transportation policy in Lithuania. The first stage provides the theoretical framework for the research. The analysis begins with the overview of the Russian oil industry, as for over 50 years Lithuania was part of the Soviet Union and thus its oil industry was largely controlled by Russian interests. Although Lithuania became independent in 1991, the dependency on Russia in terms of energy remains until today. The following chapters introduce Lithuania's development since its independence, outline the relationship with the EU and present Lithuania's intentions to become a member of the European Union. More specific issues discussed include the interdependence between Russia and the European Union in terms of crude oil and natural gas supplies and the impact of this phenomenon upon the Lithuanian oil industry. Particular emphasis is placed upon the political significance of oil in Lithuania including the ramifications of the sale of the state-owned oil transit and refining interest to USA investors and the consequences in terms of reaction from Russian crude oil suppliers. The second stage centers upon two techniques - content analysis and a scaling approach. The former was used to derive a set of the important issues within the Lithuanian oil industry, whilst the latter employed these issues in order to construct a scale for assessing the opinion of the industry's leading experts. The results of the Likert scale questionnaire were analyzed using a number of techniques and this identified a series of policies relating to crude oil and oil production in Lithuania. These policies take into account the experts' opinion, the process of EU accession and the politico-economic context of the research period, which places particular emphasis on relations between Lithuania and Russia. The final part of this thesis concludes the analysis, presents the implications as well as provides a number of suggestions for further research possibilities in this field.