The Official Visit to Mr. Ali Rıza Alaboyun

Energy and Natural Resources Minister Ali Riza Alaboyun accepted PETFORM Chairman Aytaç Eren and members of the Board of Directors in his office. PETFORM Chairman Aytac Eren congratulated Sayın Alaboyun on his new assignment and informed him about PETFORM. Mr. Eren said since the establishment, PETFORM has been working closely with all public institutions, especially the Ministry of Energy and Natural Resources, on the development of the Exploration-Production Sector and the Natural Gas Market, and that these collaborations have made way for the development of the market.

Underlining that the legalization of the Turkish Petroleum Law is an important development by the Petroleum Exploration Sector, Eren stated that they expect the same support from the Ministry in enacting the Natural Gas Market Law to include liberal market principles. The new Turkish Petroleum Law and the Turkish Petroleum Law Implementation Regulation have been put into effect and that the regulations have been made in the licenses and that the real investors have been opened with the fact that the deposit is included in the law. Mr. Eren said that foreign investors did not come to market at the desired level yet because of the low global oil barrel prices, but that they expect the investors to enter the market in the long run considering the potential in the seas.

Regarding the natural gas market, Mr Eren stated that industry expectations are slightly higher than the Exploration and sector, and stated that it is the greatest desire for a liberalized market structure. Turkey is aiming to be a commercial hub where the price of natural gas to be traded is formed in a regional sense, rather than a transit country where pipelines only pass through. Referring to the fact that gas prices are determined within the framework of free market conditions in our country, Eren said that Turkey and private sector investors will strengthen the supply and price security, and this will bring new investment opportunities for the companies.

PETFORM Vice President Aziz Camci gave detailed information to Minister Ali Rıza Alaboyun. Mr Camcı expressed after the liberalization period in natural gas market started with the law no. 4646 in 2001, the country has made a lot of progress and the distribution sector has improved a lot. The private sector has transferred 10 billion cubic meters of gas through contract devolution and now the private sector has 20% of the market share he said.

He points out referring to the fact that the prices of natural gas are not determined within the market conditions as the biggest problem and the natural gas production meets only 1% of the total consumption and that free market conditions should be operated in order to provide supply security in a country dependent on imports. Referring to the fact that public sector should not have all the burden for security of supply, Mr Camcı stated that supply and price security will be provided by both the public and private sector in a liberal market in which free market conditions occur. Mr Camcı emphasized that it would be beneficial to implement the Turkish Airlines model in the development of the natural gas market.

Camcı emphasized that crude oil prices in the global market are falling down on gas import prices within the framework of petroleum-based contracts with the drop in barrel prices, Camcı said the industry could not benefit from this process due to the rising value of the dollar. Referring to increasing supply diversity and ensuring supply security, Mr Camcı stated that a sustainable market structure should be established in order to ensure natural gas purchasing from different sources.

Mr Alaboyun stated that the Ministry defends a liberal market structure in terms of securing supply security, Alaboyun stressed that gas prices should be formed in the market like electricity prices. He pointed out that storage investments are extremely important in the context of security of supply. Minister Alaboyun said it would be beneficial for public and private sector Turkish companies to invest in exploration in other countries as well. Saying that energy should be considered not only in the local sense but also in the global sense, Alaboyun stated that supply security can only be achieved in this way.