Bourgas–Alexandroupolis oil pipeline; will matching institutional and regulatory contexts lead to an effective bargaining and eventual consensus?

Abstract

This paper employs Muthoo's bargaining principles/prerequisites for an effective bargaining result (Muthoo (2000). A Non-Technical Introduction to Bargaining Theory, World Economics 1(2): 145–166) to decide whether Greece and Bulgaria can form a successful energy coalition. Motivation for this is the proposed construction of the crude oil pipeline from the Bulgarian port Burgas to the Greek Aegean port of Alexandroupolis. The reason Turkey is the third country in the analysis despite its current non-membership in this venture, is that: (i) Turkey offers to host a competitive route of the pipeline, (ii) It is a transit, neighboring country to Greece forming an important geopolitical triangle together with Greece and Bulgaria and (iii) co-operates separately with Bulgaria and Greece in other energy pipelines. Therefore, the three countries engage to interwining energy and geopolitical futures. Whether B–A oil pipeline will be implemented or not, will be due to a mix of bargaining procedures. The paper shows that Muthoo's principles/prerequisites for an effective bargaining result, through their constituents (selected economy and energy figures and characteristics), are fulfilled by Greece and Bulgaria. A broader coalition with the inclusion of Turkey might also be permissible and promising based on this theory.