Business with Turkey

Turkey is located at a strategic place between the Middle and Near East where rich oil and natural gas reserves prevail and the Western world where the main energy consumption takes place. Turkey has made remarkable contribution to the establishment of co-operation for the stability of the region and still keeps on maintaining her said policy. It is accepted that creating a balanced international co-operation setting is an important factor at acquiring more reliable energy supply policies.

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Turkey's natural energy resources are quite diversified; hard coal, lignite, asphaltite, oil, natural gas, hydro, geothermal, wood, animal and plant wastes, solar and secondary energy resources such as coke and briquettes are produced and consumed. Although Turkey's oil and natural gas reserves seem limited, coal reserves are quite abundant.

Energy forecasts show that primary energy demand would be 90 million TOE in 2000, 117 million TOE in 2005 and 156 million TOE in 2010. However, share of indigenous productions to meet the energy demand of Turkey are expected to be as 44 % in 2000, 42 % in 2005 and 38 % in 2010. As it can be seen, the share of indigenous production will decrease progressively. Considering the production objectives and demand forecasts, it will be necessary to import a total 96 million TOE of energy in 2010.

In Turkey lignite has the biggest share in total primary energy production by 43 percent. The complex geology consisting high risks inhibited exploration in our country. For this reason in primary energy production oil has a share of 13 percent and natural gas has a share of 1 percent.

Oil has the biggest share (44%) in total primary energy consumption, while natural gas has a share of 12%. Due to the diversification efforts of energy sources, use of natural gas that was newly introduced into Turkish economy has been growing rapidly. Natural gas consumption (6.8 billion m3) is assumed to increase by 11% and will reach to 31 billion m3 with a share of 18 percent in total consumption in 2010.

The annual oil consumption of Turkey is around 28.3 million tons. While 82 % of total consumption corresponding to 23.3 million tons is supplied from imports only 18 % is supplied from indigeneous production.

Total oil production of Turkey is now around 3.630 thousand TOE, and predictions show that it would be 1.633 thousand TOE in 2000, 718 thousand TOE in 2005 and 314 thousand TOE in 2010. However, share of indigeneous production to meet the oil demand of Turkey is expected to be as 5 % in 2000, 2 % in 2005 and 1 % in 2010. Like energy, share of indigeneous production of oil will decrease progressively. Oil consumption has an opposite trend and it is expected to increase 31.429 thousand TOE in 2000, 35.866 thousand TOE in 2005 and 41.802 thousand TOE in 2010. Considering these production and consumption figures, it seems that Turkey's total oil importation will reach to 41.488 thousand TOE in 2010.

Although it is expected that the natural gas production will remain same for the future years again consumption of natural gas will increase with high amounts. Predictions show that natural gas production of Turkey will be around 168 thousand TOE for the future 13 years. In the year 2000 total natural gas consumption is expected to be 18.189 thousand TOE, in 2005 23.550 thousand TOE and in 2010 27.841 thousand TOE. Considering production and consumption of natural gas, it seems that Turkey's total natural gas importation will reach to 27.673 thousand TOE in 2010.

The 99 percent of Turkey's proven oil reserves lay under Southeast Anatolian territories. Again the major part of Turkey's proven natural gas reserves lay essentially in Thrace and in less quantity in Southestern Anatolia.

Turkish oil consumption has increased in recent years, and this trend is expected to continue into the near future. Major suppliers of crude to Turkey are Saudi Arabia, Iran, the UAE, Libya and Russia. Turkey signed an agreement to purchase 75.000 b/d of crude in December 1996 from the UN approved Iraqi oil sale. It was Turkey's first oil purchase in six years from a former key crude supplier. Oil fields in Turkey's Southeast which is the main producing area are generally small and expensive to exploit, although several promising discoveries have been made in the region in recent years. Generous tax incentives exist for exploration by the foreign companies already present in Turkey, and the government plans to make regulations progressively easier for new entrants.

Refining in Turkey is dominated by the company Turkish Petroleum Refineries (TUPRAS), which has four main refining complexes: Batman in the Southeast, Aliaga near Izmir, Izmit near Istanbul and the Central Anatolian Refinery at KIrIkkale near Ankara. Turkey's only private refinery is ATAS, near Mersin on the Mediterranean coast, a joint venture of Biritish Petroleum, Shell and local Turcas Petrolcülük. Totally the refining capacity of these five refineries are 32 million tons/year.

Main pipelines of Turkey are : Iraq-Turkey Crude Oil Pipeline with a capacity of 70.9 million tons/year, Batman-Dörtyol Pipeline with a capacity of 3.5 million tons/year and YumurtalIk-KIrIkkale Pipeline with a capacity of 5 million tons/year.

http://www.tpao.gov.tr/