Turkey Financial News

Posted by meb at October 19th, 2009

Italy, Russia and Turkey signed an agreement on building the Samsun-Ceyhan oil pipeline, according to Eni, Italy’s biggest oil company.

The project underscores a “joint commitment to enhance energy security,” according to a statement issued by Eni on Monday. The pipeline will run between Samsun on Turkey’s Black Sea coast and the Mediterranean port of Ceyhan.

The accord was signed in Milan Tuesday by Turkey’s Energy Minister Taner Yıldız, Italy’s Economy Minister Claudio Scajola and Russia’s Deputy Prime Minister Igor Sechin and Energy Minister Sergei Shmatko. (more…)

Posted by meb at October 5th, 2009

Türkiye Petrolleri Anonim Ortaklığı, or TPAO, Turkey’s state oil company, will start drilling for crude oil in the Black Sea in January, Chief Executive Officer Mehmet Uysal said last week.

The company has invested $5 billion in the past 10 years to explore the Black Sea and has identified 10 drilling prospects with capacity to cover Turkey’s consumption for 40 years, Uysal said in an interview in Bucharest.

TPAO has Black Sea exploration agreements with Brazil’s state-controlled Petroleo Brasileiro, and signed a joint operation accord with Exxon Mobil in November.

“The Black Sea has huge reserves, which will be the main supplier of Europe within 10 or 15 years,” Uysal said. “Our modest estimates for those prospects are 10 billion barrels of recoverable oil and 1.5 trillion to 2 trillion cubic meters of gas.”

Once the 10 drilling prospects are proven as oil or gas bearing, TPAO will start production studies, which will take about five to seven years, and by 2017 or 2020 it will start production in those fields, he said. (more…)

Posted by meb at October 2nd, 2009

Russian natural gas giant Gazprom is eyeing the growing Turkish market, deputy chief executive Alexander Medvedev told business daily Referans, adding that the firm might invest in the natural gas distribution and electricity production markets.

Gazprom aims to build and operate a center with the Aksa Group, a Turkish energy producer and supplier, in order to sell gas directly to Aksa once Turkey changes regulations that prevent such sales, Medvedev said.

Detailing the company’s negotiations with Botaş, the state-owned Turkish pipeline company, Medvedev said a volume discount in the context of the “purchase or pay” model is being discussed, but no official negotiations have started yet over the issue.

“We have reached an agreement on the political aspects of the Blue Stream-2 project,” said Medvedev. Speaking on Gazprom’s plans for the Turkish market, Medvedev pointed toward current legislative problems. (more…)

Posted by meb at September 24th, 2009

General Electric, or GE, a global media, technology, services and manufacturing company, has begun to invest in future technologies at its engine-parts division in Turkey’s northwestern city of Eskişehir, according to a GE executive.

The firm will produce new compressor-wing technologies only in Turkey, said GE Turkey Managing Director Kürşat Özkan. The investment totals nearly $50 million, he added.

Speaking about the global crisis and its impacts, Özkan said that GE will continue its activities in Turkey. “We have started investing in future technologies here in our Eskişehir division, although there is a capacity surplus in the world. New compressor-wing technologies will be produced only in Turkey.”

The firm has already started developing some of its production technologies in Turkey, he said, adding, “It may not sound reasonable to make such a manufacturing investment in a period marked with demand contraction in the market, but we will have positioned ourselves once the market demand returns.” (more…)

Posted by meb at July 18th, 2009

Germany’s RWE and EnBW Energie Baden-Wuerttemberg applied to bid for Turkish electricity distribution grids, Turkey’s Privatization Administration, or ÖİB, said in a statement Thursday.

RWE, ENBW and EWE were among 22 applicants who may place bids in a tender for Osmangazi Elektrik Dağıtım, a grid that serves the central cities of Eskişehir and Afyon, the ÖİB said in an e-mailed statement.

EWE may also bid for Yeşilırmak Elektrik Dağıtım, a grid covering northern Black Sea regions, along with 16 other applicants, and was one of 13 possible bidders for Çoruh Elektrik Dağıtım in the northeast of the country. (more…)

Posted by meb at July 18th, 2009

Who will pay for the pipeline construction and who will own it?

The estimated cost of the pipeline is 8 billion euros. Thirty percent of this amount will be met by the Nabucco consortium, which is composed of the participant countries’ energy companies, namely Turkey’s BOTAŞ, Bulgaria’s Bulgargaz, Romania’s Transgaz, Hungary’s MOL, Austria’s OMV and Germany’s RWE. The European Investment Bank had pledged to provide 25 percent of the cost and the European Bank of Reconstruction and Development has also promised to contribute to the project, which will be owned by the Nabucco consortium.

What is at stake for the Turkish government and other participating governments?

The Turkish government has sought a “lift-off,” a percentage of the gas in transit. Originally, the government wanted 15 percent of the gas for domestic use or re-export, but has had to withdraw this request. Instead, Turkey will have access to “up to 50 percent of the total gas set aside in a pool,” which can be purchased at a discount. As a transit fee, Turkey will gain around 450 million euros annually. Additionally, as the host of a 2,000-kilometer stretch of the pipeline, more than 10,000 jobs will be created in Turkey.

What is the importance of Nabucco?

Apart from the Baku-Tbilisi-Ceyhan oil pipeline, Nabucco will be only the second project to carry Caspian reserves to Europe from non-Russian territories. This means it will not only reduce the continent’s dependency on Russia, but also that it will, at the same time, tie Turkey closer to the European Union, bringing the country one step nearer to its goal of becoming an energy hub.

How will Nabucco change the global energy game?

Though Azerbaijan appears to be the sole gas supplier to the project at present, in the future it will be open to any third-party bidders. Once the problems over the status of the Caspian are resolved, Turkmenistan may transfer some of its reserves through Nabucco. Iraq has also expressed its intention to take part in the project and Iran may send some of its future gas to Europe if it can normalize its ties with the West. Egypt is also seen as an important future supplier. (more…)

Posted by meb at July 18th, 2009

The Finance Ministry expects to add some TL 1.4 billion in extra revenue to its coffers thanks to a recent tax hike on fuel. The government announced on Wednesday that the private consumption tax (ÖTV) would increase by Kr 20 for gasoline, Kr 15 for diesel and Kr 10 for liquefied petroleum gas (LPG), sparking outrage from consumers. Fuel distribution companies had to raise their prices on Thursday, bringing further criticism against the government and fuel market regulators. The Finance Ministry expects to take in an anticipated TL 1.4 billion this year from the tax hikes.

Data from the Petroleum Industry Association (PETDER) show that fuel consumption in Turkey was 3 million cubic meters in 2008; this number is expected to decline by roughly 6 percent this year. However, despite the decline, the state will still make a considerable amount of money with the latest price increases. Based on PETDER’s estimation, the Finance Ministry will earn TL 290 million from gasoline, TL 1 billion from diesel and TL 110 million from LPG taxes in the second half of this year.

Alleging that the increasing tax rates have an unfair impact on competition in the market, sector representatives argue that many fuel dealers are facing bankruptcy. In particular, many small distributors are losing strength, and some are closing down their shops. The ÖTV on gasoline makes up 69 percent of the total cost to consumers, 61 percent for diesel and 63 percent for LPG. (more…)

Posted by meb at July 17th, 2009

The government has given the go-ahead to the state-owned Turkish Petroleum Corporation (TPAO) to explore for oil in international waters in the Mediterranean Sea for one year.

Ankara’s move in the eastern Mediterranean, off the coast of Cyprus, is likely to stir up the waters since it will probably be interpreted by many as a show of its determination to protect its rights and interests in the region when faced with a unilateral Greek Cypriot move vis-à-vis the exploration.

A governmental decree authorizing the TPAO to explore for oil beyond Turkish territorial waters in the Mediterranean went into effect on Thursday after publication in the Official Gazette. According to the decree, published after Cabinet approval, the regions where the TPAO will launch geological surveys are four separate areas, two in the Antalya Basin and two in the Muğla Basin. The four blocs in total comprise more than 2 million hectares of area. Last month, Greek Cyprus stated that it would press on with offshore oil exploration, despite strong objections from Turkey, and would open new fields for hydrocarbon research by early next year.

Only a few days after this statement, it raised the stakes in the dispute, saying Turkey’s objection would further impede its regional rival’s effort to join the European Union. The first exploration deal by Greek Cyprus was clinched with US company Noble Energy, which has already found a large gas reservoir off the coast of nearby Israel. In response, Ankara urged third parties to use “common sense” in avoiding becoming party to actions that might be harmful to ongoing reunification talks between Greek and Turkish Cypriot leaders, while also expressing determination in protecting its rights in the Mediterranean Sea.

“The Turkish Cypriot people have rights there [in the eastern Mediterranean]. You cannot ignore this. Turkey also has rights and interests there. Our intention to protect them is known by everyone,” Foreign Ministry spokesman Burak Özügergin told reporters last month, when he also labeled Greek Cypriot actions on this issue as “in a word — adventurous.” (more…)