17 US energy firms, Russia's Gazprom mull investing in Turkey

17 US energy firms, Russia's Gazprom mull investing in Turkey

The rapidly growing Turkish economy has started to garner more attention from international investors, indicated by the fact that 17 American firms and Russia's largest company, Gazprom, are now considering investing in Turkey's energy market Todayszaman reported

The companies from the US are mostly interested in the renewable energy business in Turkey, while Gazprom, the world's largest national gas extractor, is seriously looking for an opportunity in the country's electricity market.

Speaking to a group of reporters in Ankara on Wednesday, Michael Lally, commercial counselor at the US Embassy, said American companies such as Abound Solar, AES Corporation, Clipper Windpower, General Electric, Megtec Systems and SolarReserve are among those that will make a business trip to Turkey starting Dec. 5. It will be the first time for 11 of those companies to seek business opportunities in Turkey, Lally said, adding that cooperation with Turkish companies in third countries, particularly in Russia, the Caucasus and Africa, will also be on the table during discussions to be held during their stay in Turkey.

Representatives from the Export-Import Bank of the United States and a number of other financial organizations will also be taking part in the meetings to be held in İstanbul, Ankara and İzmir as part of the planned visit, Lally also said.

The news related to Gazprom, on the other hand, hit online portals after Alexander Medvedev, director-general of the Russian company's export arm Gazprom Export, announced the company's intentions in Turkey. "We are ready to enter Turkey's electricity market, not only as a supplier but also an investor," he was quoted as saying by the Anatolia news agency Thursday. Gazprom's venture into Turkey's domestic electricity market would likely be in partnership with a local operator.

Speaking with Today's Zaman on Tuesday, a spokesman for Gazprom declined to comment on specific targets being considered by the state-owned gas giant. "Gazprom is at the preliminary stage of discussions regarding investment in Turkey's electricity grid. We will continue to evaluate the different options in terms of electrical grids in Turkey and potential partners," he said.

The move follows failed privatization tenders this year for the Akdeniz Elektrik grid in Turkey's Mediterranean region and İstanbul's Anadolu and Rumeli grids as well as the Toroslar, Dicle, Gediz and Trakya grids after the highest bidders for each failed to make payments by the respective deadlines.

The inability of top bidders provide funds on time reflects the difficulty of procuring funds from international investors in the current financial climate, analysts suggest. Gazprom, awash with cash after net profit jumped 56 percent to $25 billion for the first half of 2011, could fill the void, benefitting from one of the fastest growing electricity markets in the world, with energy demand expected to double between now and 2020.

Medvedev said on Wednesday that negotiations with private Turkish gas distributors were taking place this month in response to the cancelled western pipeline deal with the state-owned Turkish Petroleum Pipeline Corporation (BOTAŞ), which saw 6 billion cubic meters (bcm) of gas supplied through the Balkans annually. "We will decide on the procedure to be applied to Turkey regarding gas sale as of January 1, 2012 during our meeting with Turkish executives in November," with meetings scheduled for next week in İstanbul, Medvedev said.

Medvedev said that Gazprom would be seeking agreements reflecting the market price for gas, with the company pushing for further liberalization of the gas market and a move away from the subsidized rates that governed long-term contracts with BOTAŞ in the past.

In October, BOTAŞ cancelled the contract after Gazprom refused to offer a rebate on gas prices. Medvedev refuted analysts' suggestion that the terminated contract was surplus to Turkey's requirements, saying that Turkey needed Russian gas.

Gazprom supplied 63 percent of all of Turkey's gas imports in 2010, with the cancelled deal representing one-third of that.
Turkey to sign deal with Shell for gas exploration in Med

Turkey will sign an agreement with oil giant Shell for exploration of natural gas in the eastern Mediterranean, Turkish Energy Minister Taner Yıldız said on Wednesday.

Yıldız said the deal with Shell would pave the way for exploration of oil and natural gas both in Turkish territory and off Turkey's coasts. He said talks with Shell will begin next week.

The planned deal with Shell comes as US company Noble Energy, licensed by the Greek Cypriot administration, drills for natural gas off the island's southern coast. Turkey has protested the exploration, saying Turkish Cypriots, who run their own state in the north of the island, also should have a say in deciding what to do with Cyprus' gas and oil reserves. Turkey has also sent an exploration ship to the eastern Mediterranean and, raising the possibility of a naval confrontation, said its exploration vessels will be escorted by warships.

Turkey's state oil company the Turkish Petroleum Corporation (TPAO) and Shell have already agreed in principle to a deal, and the agreement is expected to be signed by the end of this month, a news report in the Sabah daily said on Wednesday. According to the report, Turkey will license Shell to explore for oil and gas in Turkey's exclusive economic zone in the eastern Mediterranean, off the coast of the southern province of Antalya.

If the agreement is finalized as planned, Shell will undertake to finance the drill, which is expected to cost at least $300 million. It will bring a massive oil exploration platform to the Mediterranean and will share revenues from hydrocarbon finds with Turkey. According to Sabah, TPAO has ascertained that there are potential oil and gas reserves in three areas in the eastern Mediterranean. There was no information on the estimated market value of the estimated reserves.

Authorities say there is serious potential, particularly in the Gulf of Mersin, in the Mediterranean and estimate a drill of 5-6,000-meters in depth in this area is likely to find significant hydrocarbon reserves.

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