Turkish ship explores near Greek Cypriot gas rig

Turkey said on Tuesday it was exploring for gas in an offshore zone where Greek Cyprus started drilling last week, the latest step in a battle over Mediterranean resources that overshadowed the resumption of peace talks for the divided island.

Turkish research ship Piri Reis is in Eastern Mediterranean for oil and gas exploration. (Photo: Zaman)
Turkish research ship Piri Reis is in Eastern Mediterranean for oil and gas exploration. (Photo: Zaman)

On Sept. 23, Turkey dispatched its only research vessel, the Piri Reis, to the eastern Mediterranean.

“Piri Reis, escorted by warships, has started research in the same area where Greek Cypriots are exploring,” Ömer Çelik, deputy chairman of the ruling Justice and Development Party (AK Party) who oversees foreign affairs, said on Twitter.

“We have shown clearly to everyone that we will not allow the eastern Mediterranean to become a Greek Cyprus-Israel goal,” Çelik said in another message.

The Turkish Cypriot prime minister had said overnight that the vessel had begun exploring, but did not say precisely where. Greek Cypriot sources have said the Turkish vessel is about 80 km (50 miles) from where the Greek Cypriots are drilling.

The question of who has the right to tap what may be the world’s biggest natural gas find of the past decade has added sudden urgency to long delayed efforts to settle the conflict over Cyprus, divided since 1974 into Greek and Turkish enclaves.

The internationally-recognized Greek Cypriot government says it has a sovereign right to drill. Turkey, the only country to recognize a separate Turkish Cypriot government in the north of the island, says the island’s status must be resolved first.

In Nicosia, Greek Cypriot leader Dimitris Christofias and Turkish Cypriot leader Derviş Eroğlu resumed peace talks on Tuesday after a 10-day break for UN General Assembly deliberations.

The two sides are racing to make progress on complex reunification negotiations before a scheduled encounter with UN Secretary-General Ban Ki-moon at the end of October. The hydrocarbons controversy had not come up in the talks, a source close to consultations told Reuters.

Last week, US-based Noble Energy started drilling offshore on behalf of Greek Cyprus in an area termed Block 12, south of the island. Turkey has pledged to drill for gas on behalf of Turkish Cypriots unless the Greek Cypriots stop.

“If the Greek Cypriots agree to stop, we’ll stop too. But if they insist on proceeding, they know very well Turkey’s attitude,” Turkey’s minister for European Affairs, Egemen Bağış, visiting the Turkish side of the island, said on Tuesday.

“We have to warn against Greek Cypriot provocation. The resources are not going anywhere, so why are they being used to block [Cyprus reunification] negotiations?”

Bağış said the Greek Cypriots cannot unilaterally claim right over “the island’s shared resources” and added: “Those who take unilateral steps in this regard will get the response from Turkey.”

Last week, Turkey and Turkish Cyprus signed their own pact outlining maritime boundaries in the eastern Mediterranean, paving the way for gas exploration. Turkey said it would protect any research vessel with warships, raising the prospect of an armed stand-off on the high seas.

Turkey’s Navy has made no announcement regarding the deployment of warships in the area. But captain of the research ship, Umut Yenice, told the Anatolia news agency on Tuesday that the crew was “in frequent contacts with the Turkish frigates nearby.”




Turkey says to welcome Korea’s proposals on nuclear power plant

Turkish economy minister has said his country would welcome proposals from South Korea in a project to build a nuclear power plant.

“My ministry and the Turkish government are open to every proposal by South Korean companies over the issue of nuclear power plant,” Zafer Caglayan told reporters during a meeting with South Korean Knowledge Economy Minister Choi Joong-Kyung in Seoul.

Turkey plans to construct two nuclear plants, one in the southern town of Akkuyu on the Mediterranean coast — which will be constructed by Russia’s state-owned atomic power company ROSATOM with an estimated cost around 20 billion USD.

Construction of the Akkuyu nuclear power plant is planned to start in 2013 and the first reactor is planned to generate electricity in 2018.

The other nuclear plant is planned to be built in the Black Sea province of Sinop. Turkey had been negotiating with Japan’s TEPCO company which last week informed Turkey that it had withdrawn from the project.


Turkish govt pledges “permanent solution” over current account deficit

Turkish government has expressed resolve that it would make necessary structural reforms to find “a permanent solution” to the problem of current account deficit.

In a statement released Tuesday after a three and a half hour meeting headed by Prime Minister Recep Tayyip Erdogan and participated by a number cabinet members, the government said the meeting discussed latest negative developments in advanced economies of the world and their possible effects on Turkey’s economy.

“Recent developments are not expected to make long term, permanent negative impacts on Turkey’s economy and financial markets given our country’s strong political stability and resilient macro economic foundations,” the statement said.

The statement said all government authorities in charge of economy kept a close eye on economic developments with contingency scenarios in place.

The government also expressed commitment to maintain and strengthen fiscal discipline, to improve environment for investments, take measures to boost employment, to fight unregistered economy and reduce foreign dependency in energy.


Turkey posts 11% growth in Q1, claims top spot worldwide

Growth in the first quarter was led by a surge in private spending. As of May, sales of automobiles are up by around 40 pct. AFP photo

With private investments and domestic consumption leading the charge, Turkey claimed the top spot in economic growth worldwide for the first quarter of 2011 with a blistering 11 percent, according to the Turkish Statistics Institute, or TurkStat.

At this rate Turkey will surpass $742 billion, its pre-crisis 2008 level of gross domestic product, by the end of the year, Premier Recep Tayyip Erdoğan said Thursday during a meeting with his Justice ruling party’s, parliamentary group.

Turkey led the world in first-quarter growth this year, posting an astounding rate of 11 percent thanks mainly to private investments and consumption, according to data revealed by the Turkish Statistics Institute, or TurkStat.

The fastest growing sectors in the quarter were wholesale and trade, which boasted a 17.2 growth rate. Construction was another leader at 14.2 percent while the energy, transportation and communication sectors also supported the growth.

Speaking at his Justice and Development Party, or AKP’s, parliamentary group meeting Thursday, Prime Minister Recep Tayyip Erdoğan said Turkey would soon surpass the gross domestic product, or GDP, of $742 billion the country had created in 2008, before the global economic crisis.

Argentina and China followed Turkey with rates of 9.9 percent and 9.7 percent.

The positive economic news, however, was contrasted by the country’s large trade deficit.


Turkey’s exports in May reached a volume of 10.9 billion Turkish Liras, an 11.7 percent rise compared to the same month a year earlier. Imports, on the other hand, hiked 47.6 percent, reaching a total volume of 21.5 billion liras, resulting in a gap of 10.57 billion liras – a 104.2 percent increase – TurkStat data said Thursday.

In the first 5 months of this year, the country’s exports neared $54.3 billion from $45.2 billion over the previous year, a 20.1 percent increase. Imports, meanwhile, reached $98.2 billion from $68.2 billion, reflecting a 43.8 percent growth. The gap stood at nearly $43.8 billion as the exports accounted for only 55 percent of the import total.

While many emerging economies were enjoying big growth rates in the first quarter, Europe, which has been fighting with debt problems, grew an average of 2.5 percent, while non-eurozone countries such as Estonia, Lithuania and Sweden achieved big growth rates.

Leading indicators have shown no slowdown in private consumption, and investment expenditures are still strong, said Turkish lender Akbank in a note to investors after the release of the figures.

“The foreign trade gap, excluding the energy sector, hit $25.9 billion in the first five months of the year,” the note said.

Foreign trade statistics from May did not surprise market players since it confirmed that deterioration in the monthly foreign trade deficit persisted in May, said Özgür Altuğ, the chief economist at the BGC Partners said in a separate note. “However, the monthly deficit was again larger than expectations.”

“In addition to the aforementioned factors, foreign trade figures adjusted [to the season and the business day] also signal that the worsening is continuing,” he said. “Consumption goods imports, which should decelerate in the coming months, recorded a year-on-year increase of 38 percent in May, which was 38 percent in April, while imports of intermediate goods registered a 37 percent year-on-year increase in May, which was again 37 percent in April.”

Altuğ said the product breakdown of increasing import items were as follows: Aircraft (325 percent); cereals (306.2 percent); precious metals (243 percent); motor vehicles (65 percent); energy (50 percent); machinery (50 percent); rubber (48 percent); and copper (45 percent).

“It is worth noting that the impact of rising global energy prices will be felt more pronounced in June, according to our analysis,” he said.

The foreign trade data again did not offer a calming picture in May, said Banu Kıvcı Tokalı of Destek Securities. The rise in the 12-month current account deficit figures will continue until the mid-third quarter, she said. “We can see a level of $70 billion in that period.”

“Rather than showing evidence that the Turkish economy is responding to the Central Bank’s ‘unorthodox’ efforts to slow it down, this data suggests that the economy may even have accelerated – real GDP grew by 9.2 percent year on year in the fourth quarter, and by 8.9 percent for the full year in 2010,” Timothy Ash, the chief economist at the Royal Bank of Scotland said in a written statement.


Turkey wants to clarify future of nuclear talks with Japan

Turkish government wants to make future of nuclear talks with Japan clear by mid-July, Turkey’s energy minister said Friday.

Following an agreement with Russia to construct Turkey’s first nuclear power plant in the Mediterranean port of Mersin’s Akkuyu town, Turkey has been engaged in talks with Japan since last year to build country’s second nuclear power plant in Sinop in the north. However, talks were interrupted after the massive earthquake that hit Japan last March.

Taner Yildiz said Turkish government wanted to know if Japanese companies would ask for some time from Turkey.

“We want to make it clear by mid-July,” Yildiz said.

Talks were underway with Japanese companies Toshiba and Tokyo Electric Company (TEPCO), which operates the troubled Fukushima Nuclear Power Plant.
Japan’s magnitude-9 earthquake on March 11 caused a massive tsunami that crippled the cooling systems at the Tokyo Electric Power Company’s (TEPCO) nuclear plant in Fukushima.

“We know they are in serious trouble as the operator of Fukushima,” Yildiz said.

“We have told them that we would stand by them in this period of time. But if they would not be able to get involved in this project, we think it would be necessary for Turkey to review its program on the construction of nuclear power plants,” he added.


Turkey’s Islamists Win 3rd Straight Term in Govt.

Turkey’s Islamist-leaning Justice and Development Party (AKP) won a landslide victory in nationwide parliamentary elections June 12, according to results released June 13, securing a third consecutive term in government since 2002.

Led by Prime Minister Recep Tayyip Erdogan, the AKP garnered nearly 50 percent of the general vote, while the main opposition party, the center-left Republican People’s Party (CHP), got about 26 percent. The AKP and the CHP won 426 and 135 deputies, respectively, in the 550-seat parliament.

Two smaller groups, the Nationalist Movement Party and the pro-Kurdish Peace and Democracy Party, became the only other parties to be represented in parliament, with much smaller numbers of seats.

AKP leader Erdogan will create the next single-party government before the end of this month.

Under the AKP’s rule, Turkey over the past nine years became an economic powerhouse of the Islamic world, affected only minimally by the global financial crisis in 2008. From a buyer of defense equipment, it turned into a manufacturer of most of its defense needs itself.

But many Western observers suggest that Turkey in the meantime turned its back on NATO and other institutions of the Western world, including moves to bolster ties with Islamic countries in the Middle East and a major deterioration of relations with Israel, its former ally.


Turkey warming to France as Nabucco seeks 7th partner

Nabucco Pipeline Project

Turkey is leaving the door open for the involvement of France in the multi-national Nabucco project amid plans to extend its scope to include a seventh partner.

“There could be one or more partners to the project,” Energy Minister Taner Yıldız told a group of journalists Thursday in his hometown Kayseri, one day after five transit countries undersigned project support agreements with the Nabucco International company.

Turkey’s Yıldız chaired Wednesday’s committee meeting where the Nabucco consortium and government representatives discussed plans to involve additional parties.

“We will evaluate different proposals as almost every party said we need to be more flexible,” said the minister, when asked about the possibility of the French involvement.

Turkey blocked French company Gaz de France’s participation in the European Union-backed Nabucco project for political reasons. The minister’s remarks, however, show a significant shift in the Turkish position toward France.

“I think the door is open not only to countries but also to companies,” Hungary’s National Development Minister Tamas Fellegi told the Daily News in an interview in Kayseri. He said the consortium behind the project should discuss this issue very frankly.

“I would not rule out any country just because of the basis of nationality or counter background. The Nabucco project, don’t forget, is a significant European Union project that is politically and financially supported by the EU. And France is a member of the EU,” he told the Daily News.

The idea came after some Nabucco participating states expressed intentions to involve additional parties especially from the side of gas supply countries.

“I think the participating countries should make the decision later this year,” said the Hungarian minister.

‘No financing without seeing the gas’

Nabucco cannot be finalized without source countries, said Yıldız, adding that finding supplies was as important as securing financing for the project.

The director-generals of the European Investment Bank and the International Bank of Reconstruction and Development were also present at the signing ceremony. Yıldız said the governments sustained “necessary” conditions for the financing of the project but added that was “not sufficient.”

“Financing cannot be done without seeing the source country, and indeed without seeing the natural gas,” he said.

None of the potential supply countries were present at the signing ceremony. Azerbaijan did not attend the event despite the Turkish Energy Ministry’s invitation.

Yıldız, however, downplayed concerns over Baku’s absence. “Azerbaijan was hosting an oil and gas conference, otherwise they would have come.”

‘Project support deals delayed due to Hungary’

Yıldız said the project support agreements, subjected to the Swiss law, were including close to 40 provisions from taxation, environment impact to technical details. He argued the deals were going to be signed earlier, putting the blame on Hungary for their delay.

Third parties in Europe that are not involved in Nabucco can conclude bilateral energy deals with supply countries and can transport this gas through Nabucco pipeline by leasing, said Yıldız.

“This is a commercial project. For example, Switzerland struck a gas deal with Iran and it will be able to lease the Nabucco pipeline to ship this gas back home,” he added.

The minister invited third countries to “find cheap gas and bring it home through Nabucco.” He also made it clear that Turkey was not in need of gas that would come from Nabucco, saying that Turkey would not be the party that would lose if the project did not come true.

‘Ball is not in Turkey’s court’

Yıldız responded to the statement by the U.S. envoy for Eurasian Energy, Richard Morningstar, who called on Turkey and Azerbaijan to sign a deal for the sale of natural gas.

“An agreement will be concluded between Nabucco consortium and Shah Deniz II. Turkey will not sign a deal on behalf of Nabucco,” said Yıldız. “Turkey is doing its share at the every phase of the project. It is not appropriate to throw the ball into Turkey’s court.”

Minister slams German decision to close nuclear plants

Energy Minister Taner Yıldız hit out at German plans to shut down all of the nation’s nuclear power plants within the next 11 years, saying, “It is like putting on the brakes while speeding on the highway.”

Yıldız criticized Germany for explaining differently to the public the reason for its closure of old plants.

“I see Germany’s main reason being that it will close expired plants. We also want the closure of 40-year-old plants. The closure of aging plants does not mean new ones cannot be opened,” added the minister.

The head of the Energy Market Regulatory Authority, or EPDK, said Germany took such an initiative due to political reasons. Hasan Köktaş said that Germany was meeting 23 percent of its electricity energy from nuclear plants and it was not possible for Germany to close its plants.

“Germany made such a decision in previous years and de-functioned two plants made in 1971, 1972. That was entirely because of technical reasons,” he added.


Nabucco partners call on Baku to join project ‘without delay’

As the European Union’s flagship Nabucco project to pump Caspian gas to European markets inched one step closer Wednesday to becoming a reality, participant governments strongly urged potential suppliers including Azerbaijan to clarify their position and join the project “without delay.”

Azerbaijan, Turkmenistan and Iraq are considered as potential sources to fill the 3,300-kilometer Nabucco pipeline that will run from Turkey to Austria, crossing Romania, Bulgaria and Hungary.

“I have contacts with Azerbaijan, Turkmenistan and Iraq. If all these countries wish to access European and Turkish markets, the possibility is Nabucco,” EU Energy Commissioner Guenther H. Oettinger said during a ceremony for the signing of technical deals in the Central Anatolian province of Kayseri on Wednesday.

The commissioner called on the source countries, “who are not there,” to take part in the strategic project “without any delay.” Azerbaijan did not send any representative to the ceremony despite the Turkish Energy Ministry’s invitation.

“Nabucco must take the final step from project to reality but there are issues that need to be addressed,” said Oettinger, adding that gas-producing states particularly Iraq and Azerbaijan must be given options for development of their energy markets and their direct access to European markets.

Open invitation to Russia and Iran

“Now it is the turn of source countries,” said Turkey’s Energy Minister Taner Yıldız, hosting the event in his election constituency and hometown Kayseri.

The minister gave a green light for two other countries, Russia and – if the political conjecture allows, Iran – to join the project.

“No matter if it is Azerbaijan, Turkmenistan, Iraq, or if it is Russia and Iran – if the global conjecture permits – there are projects for all of them where their interests overlap,” said Yıldız.

South Stream, Interconnect Turkey-Greece-Italy and the Trans-Adriatic Pipeline were among the projects the minister listed and urged the potential suppliers to see the “big picture.”

“What’s in this big picture? To meet energy needs of the European countries,” he said.

The project support agreements signed between the participant governments and the consortium of the Nabucco gas transit pipeline project, considered prerequisite for the successful financing of the project, also offered a platform for the governments and a strong supporter of the project, the United States, to discuss the present situation.

[HH] US calls for Turk-Azeri gas deal

The U.S., meanwhile, called on both Turkey and Azerbaijan to sign an agreement for the sale of natural gas “as soon as possible.”

“I look forward to seeing the next step,” said Richard Morningstar, special envoy of the U.S. Secretary of State for Eurasian Energy, who joined the ceremony in Kayseri.

“I hope this will be done as soon as possible because it is critically important for the success of project,” he said.

The U.S. official reiterated the huge importance President Barak Obama places on the Nabucco project, saying it also symbolized “long-standing, very strong relationship between the United States and Turkey that goes back many years.”

Morningstar said although the U.S. is not a party to the project, it believed the southern energy corridor also including Nabucco was critically important for the diversification of energy supplies.

EU message from Energy Minister

Energy Minister Yıldız, in his speech, sent a message to the European Union, saying Turkey was doing its best to meet Europe’s energy needs despite negative signals coming from the EU with regard to Turkish accession talks.

“Turkey did its best for a solution to EU countries’ problems without expecting anything in return,” said Yıldız. “And we expect the same treatment from the EU. It is evident that Turkey needs the EU and the EU needs Turkey. I want to say it again that it is not correct to delay Turkey’s EU talks for political reasons.”


Azerbaijan says sees transit gas deal with Turkey soon

The Baku–Tbilisi–Ceyhan (BTC) pipeline is a 1,768 kilometres (1,099 mi) long crude oil pipeline from the Azeri-Chirag-Guneshli oil field in the Caspian Sea to the Mediterranean Sea.

Azerbaijani President Ilham Aliyev has said his country is about to conclude negotiations about the transit of natural gas with neighboring Turkey, terming his country a “gas-rich country.”

Aliyev delivered his speech at the 18th International Caspian Oil and Gas Expo in Baku on Tuesday, where Special Envoy of the United States Secretary of State for Eurasian Energy Ambassador Richard Morningstar, EU Energy Commissioner Günther Oettinger, Norwegian Crown Prince Haakon, Georgian Energy and Natural Resources Minister Alexander Khetaguri and Turkish Ambassador to Azerbaijan Hulusi Kılıç, along with other ambassadors, were present.

Stressing the importance of the “Deal of the Century” that was signed in 1994 — a groundbreaking deal that catapulted Azerbaijan’s oil industry, Aliyev said at the opening ceremony of the expo that the agreement has brought foreign investment into the country.

Recalling that Azerbaijan’s oil is being exported through three different ways, Aliyev said the Baku-Tbilisi-Ceyhan (BTC) oil pipeline has contributed much to the booming economy.

Oil prices have risen by a third since the beginning of the year, buoyed by unrest in North Africa and the Middle East which unseated the Egyptian and Tunisian leaders.

For the government of Azerbaijan, which pumps about a million barrels of oil a day, the price increase means more than $4 billion in extra oil money for the state budget.

Aliyev also noted that he believes in the possibility of the realization of the “Southern Corridor” pipeline project, adding that Turkey and Azerbaijan are currently in the final stages of transit gas negotiations and that the transit gas deal is envisaged to be signed with Turkey “soon.”

Morningstar said while testifying before the US Congress last week that three pipeline consortiums are competing to bring natural gas from Azerbaijan’s Shah Deniz gas field to Europe, and the investment decisions to make that possible should be made by the end of this year.

Aliyev also said Azerbaijan was known as an oil-rich country but added that newly found gas reserves have made Azerbaijan famous for its gas reserves, adding that Azerbaijani gas could be sufficient for both Azerbaijan and other countries.

A total of 285 companies from 27 countries participated in the fair. Five companies from Turkey were at the exhibition.


Energy minister announces date to shutdown nuclear plants

This photo shows a nuclear power plant in Switzerland. Turkey has no power plants yet. AFP photo

Turkey has yet begun the construction work for the first of its at least two planned nuclear power plants, but the country’s Energy Minister already has a date to shut them down.

“We will shutdown the nuclear power plants to be built in Akkuyu, Mersin and Sinop in 2071, the 1,000th anniversary of the Battle of Manzikert,” Energy Minister Taner Yıldız told Radikal in the Central Anatolian province of Kayseri, where he tops the parliamentary candidates list for the ruling Justice and Development Party, or AKP.

The Battle of Manzikert was fought between the Byzantine Empire and Seljuq Turks led by Alp Arslan in August 1071 near Manzikert, modern Malazgirt in the eastern province of Muş. The decisive defeat of the Byzantine army and the capture of the Emperor Romanos IV Diogenes played an important role in undermining Byzantine authority in Anatolia and allowed Turks to gradually populate Anatolia.

Yıldız said all security precautions have been considered for the nuclear power plants and no one should wrongly interpret Germany’s decision to shutdown its nuclear plants in 2022.

“If the nuclear plants are so dangerous, why don’t they shut them down immediately instead of waiting till 2022?” said Yıldız. “The plants to be closed are 30-40 years old and will have completed their economic life. There are 26 nuclear power plants around the world, which I believe all should be shutdown on that date.”

Turkey has agreed with Russia’s Rosatom and signed a contract one year ago to build its first nuclear plant, which will have four reactors, in the Mediterranean province of Mersin’s Akkuyu district. The licensing process for the plant, which will cost about $20 billion, is still in progress.

The government is also holding talks on the planned Sinop plant. Before the Japanese earthquake, Japanese companies seemed to be ahead on a possible decision. Turkey and Japan signed a memorandum on civil nuclear cooperation last December, but the plans have been put on hold since the Fukusihima disaster.

Still, the energy minister already has a date in mind to shutdown the two power plants. “You can directly quote me on this; we are planning to shut down our nuclear plants on 2071, on the 1,000th anniversary of the historical victory in Malazgirt.”

Yıldız believes the ruling AKP, the main opposition Republican People’s Party, or CHP, and the Nationalist Movement Party, or MHP, agree on the country’s nuclear policies, which are opposed by environmentalists. All three parties defend nuclear power plants in their election manifestos, Yıldız said, adding the CHP leader Kemal Kılıçdaroğlu voices different ideas when he is on television.

“The CHP is telling the truth in its election manifesto, but Kılıçdaroğlu is saying just the opposite,” said Yıldız. “I do not want to use any bad words; this can be a sign of being tired. Such major mistakes overshadow the dignity of politics. I’m ready to sincerely brief Kılıçdaroğlu and tell him about the fundamentals of nuclear power.”

The energy minister said there is major “con” on nuclear energy, recalling four former executives of the environmental organization Greenpeace who are now working for the nuclear energy sector. “More than half of Turkish people support nuclear energy and we will start a public relations campaign to remove some misunderstandings.”