MESOP NEWS REPORT : A BAD BLOW AGAINST ERDOGAN – Turkey’s dream of becoming an energy center at risk – Hurriyet 28 Nov 2017

Projects concerning newly found East Mediterranean gas to be transferred to Europe through Turkey recently had an important place in Ankara’s dream of becoming an energy center. Turkey is not a producer country, but it had been dreaming of becoming an energy center in natural gas and petroleum traffic, benefiting from its geostrategic location between crucial markets. It would thus both ensure its supply of energy security and increase its negotiation power with Europe. This dream of becoming an energy hub was behind planning for the Ceyhan region in the Mediterranean province of Adana.Meanwhile, imports from northern Iraq have increased, strategic petroleum regions have been identified and gas reserve potential studies have been carried out.

TEC, a joint venture that includes the international arm of the state-owned Turkish Petroleum (TPAO) company, was founded in order to increase Turkey’s power in international energy production.But now it is clear that the fallout from the Iraqi Kurdistan Regional Government (KRG) independence referendum process in September has damaged Turkey’s regional position in terms of energy.

Everyone in the sector knows that when the KRG was ruling Kirkuk – even if only de facto – serious steps were taken in terms of joint tenancy of the region’s energy resources. Many say that although Turkey was right to oppose the referendum, its reaction was exaggerated and led to negative developments in terms of the supply of energy security.

Experts note that Turkey is the subject of an ongoing multi-billion arbitration case, based in Paris, with the central Iraqi government. The latter filed the lawsuit over Turkey’s oil deals with the KRG, and there has so far been no sign that Iraq has withdrawn it. The first statement made by the Baghdad government after retaking control of Kirkuk was about transferring oil that had headed through Ceyhan in Turkey to Iran through a new pipeline. As a result, Ankara now risks entirely losing out on the oil coming from the region. Although the amount has decreased very much, there is still an oil flow from the region to Turkey. But this flow may stop soon if Iraq’s central government and the KRG cannot come to an agreement.The KRG continues to give a certain amount of money to companies that extract the resources, but many are afraid that this money will not be able to be paid soon. If it is not, the private corporations operating there will have to halt production.

Eastern Mediterranean gas is also in danger

Newly found East Mediterranean gas to be transferred to Europe through Turkey also took an important place within the dream of becoming an energy center.But last week the leaders of Egypt, Greece and Greek Cyprus met in Cyprus to make an initial agreement to bring the gas under the sea through a pipeline to Greece, and from there transferring it to Europe. If this project is carried out, Turkey will be excluded. The underwater pipeline to Greece will be almost twice as expensive as the one that would pass under land through Turkey. But if the gas from the Eastern Mediterranean and the gas from Israel can all come together in the same joint project, the Greece-Greek Cyprus-Israel plan is far from illogical.Considering all this, we must also not forget our troubled relations with the EU and our bad relations with Egypt again come to mind.It seems like Turkey’s dream of becoming an energy center has vanished with recent developments. The country’s foreign policies must not risk the country’s economic and security interests.