Thursday, August 18, 2011

Turkey seeks partner as Japan nuke talks linger

According to Finnish official, TVO, which runs a nuclear power plant in Finland’s Olkiluoto Island, is a possible candidate to operate a to-be-built nuclear plant in Turkey. AFP photo

Wednesday, August 17, 2011

ISTANBUL- Hürriyet Daily News, Gökhan Kurtaran, 

Turkey will consider talks with countries other than Japan for a nuclear power plant to be built in Sinop, a ministry official says. A Finnish expert confirms nuclear operators from Finland might also be intersted.

Turkey has lost time with its negotiations with Japan on the plans to build a nuclear power plant in Sinop, and it has decided to negotiate with other countries as well, an Energy Ministry official told the Hürriyet Daily News. Finnish nuclear operators are also among the possible candidates.
“We have lost time while negotiating with Japan,” the ministry’s press undersecretary, Ali Eskigün, told the Hürriyet Daily News in a phone interview on Wednesday. The ministry decided Tuesday to start negotiations with other countries for the nuclear plants planned to be built in the country, he added. “Japan agrees to construct the nuclear power plant, but they want another company to be its operator.”
Meanwhile, the country is also considering Finnish companies for a partnership to conclude an agreement for operating a nuclear power station planned to be built in the Black Sea province of Sinop, as Japan’s TEPCO withdrew from the plant bidding on Aug.4.
A Finnish official mentions names of two companies as possible candidates to operate the plant.
“Teollisuuden Voima Oyj [TVO] and Fortum Oyj might be among the possible candidates,” Risto Isaksson, head of the Public Communication at Finnish Radiation and Nuclear Safety Authority, or STUK, told the Daily News in a phone interview on Tuesday.
Turkish Energy Minister Taner Yıldız told Reuters on Monday, “If we could not reach an agreement with Japan, then we might consider China and Finland.” After Japan, Canada and France, for the first time Finland has been ranked among possible candidates to operate the plant to be built in Sinop.
Turkey is interested in “offers from Finnish companies” as well as other possible candidates from other countries, said Eskigün. “The important thing is for Finnish companies to be interested in [Turkey’s nuclear energy plans], rather than Turkey be interested in them.”
No comment
“I’m sure you understand that as a stock exchange listed company, Fortum does not comment on the question,” Helena Aatinen, Fortum’s vice president for Corporate Relations & International Affairs, said in an e-mail response to the Daily News on Wednesday.
Fortum Oyj operates in 14 countries including Finland, Sweden, Norway, Russia, Lithuania, Latvia, Poland, Belgium, Netherlands and Germany. In Finland, it has two nuclear power plants at Lovissa.
“I do not think any of the [Finnish] companies would be the right candidate for such a major task,” Haluk Direskeneli, an Ankara-based energy analyst, told the Daily News in a phone interview on Tuesday.
However, a Finnish energy expert disagreed. “There is no doubt that Finland has the know-how and experience in operating nuclear power plants.” Juha Naukkarinen, a energy expert at Energiateollisuus, told the Daily News in a phone interview on Wednesday. “There has not been any minor accident or leakage in our plants.”
TVO Oyj, the other possible candidate for Turkey’s nuclear energy plans in Sinop, currently runs two nuclear power plant units at Olkiluoto plants in the Finnish province of Eurajoki, producing more than 16 percent of all the electricity consumed in the country.

Wednesday, August 17, 2011

Explosions spark energy dependence concerns in Turkey

Photo: Gas service is expected to be restored by next week. [Reuters]

By Alakbar Raufoglu for Southeast European Times -- 17/08/11
The PKK claimed responsibility for two recent attacks on a Turkey-Iran gas pipeline -- the August 11th explosion in Agri, Turkey, and the one in Bazargan, Iran, on July 29th. The line, which carries approximately 30m cubic meters of gas a day, was shut down after both incidents.
Officials in Ankara hope to resume full gas flows by next week.
"Iran is our very important [gas] supplier. We will overcome such incidents as we did before," Parliament's Energy Committee Chairman Mahmut Mucahit Findikli toldSETimes.
Iran is Turkey's second largest supplier of natural gas after Russia. Gas exports from Iran to Turkey showed about a 7% increase in the first half of this year compared to last year.
Meanwhile, the recent incidents raised further concerns among critics of Turkey's energy dependence on Iran.
"They [Iran] use gas delivery as political leverage," Ankara-based energy analyst Haluk Direskeneli told SETimes, adding that Iranian gas is "totally unreliable for Turkey's domestic consumption".
"They [Iran] supply poor quality (low HHV, high sulphur) gas. They also interrupt the flow, the pipeline is not secure, prone to explosions, and subject to PKK attacks all year long," he said. "
Turkey should reduce overall natural gas consumption and return to its local resources, namely renewable -- wind/ solar/ hydro and clean coal technologies firing local lignite in a difficult but smooth transition."
Veli Agbaba, CHP MP and member of the parliament's Energy Commission, believes the PKK attacks underscore that this pipeline is neither secure nor reliable.
"It is rather how Turkey can overcome terrorism in its territory, than the pipeline's reliability [that is important]," he told SETimes, adding that Ankara should take such risks into consideration in its energy policy.
Alexander Jackson, a London-based energy security analyst, focusing on Turkey and the Caucasus, said that the recent attacks forced Turkey to increase imports from Azerbaijan and Russia.
"Although Turkey has taken efforts to cultivate energy ties with many suppliers, allowing it to be flexible, short-term switches in supply are volatile and not necessarily sustainable," he toldSETimes. The chief lesson for Turkey to take away from this is that until the PKK is defeated, its entire web of strategic infrastructure in the southeast is vulnerable, he added.
Nader Habibi, Middle East economy analyst at Brandeis University's Crown Center, also believes politically motivated attacks on Turkey-Iran pipelines are likely to occur in the future, as both countries face Kurdish separatist movements.
"Since Iran faces considerable international pressure and sanctions, it has a strong incentive to maintain its close economic ties with Turkey and it is unlikely that the gas supply will be unilaterally interrupted unless there is severe political tension between the two countries," he toldSETimes.
Findikli, however, said the PKK attacks "would have zero influence on Ankara's energy policy towards Iran".
"There is no reason to dismiss Iran's importance in our energy policy. We need this door -- not only for Turkey's energy security, but for Europe's, as well," he said.
But local analysts still question the benefits of "Iran's door", saying Tehran is not a source of diversified energy routes for Europe and Turkey.
"Natural gas is a heroin for the consumers, but when it comes to the price, there is no negotiation between buyer and seller. Gas prices are being increased all the time and the buyer has almost no power to say 'no'," Direskeneli said.

Saturday, August 13, 2011

Imports no solution to energy gap, experts say

This file photo shows the world’s second largest oil-exploring platform Leiv Eiriksson leaving Turkey in March after one year exploration in the Black Sea. Hürriyet photo

ISTANBUL- Hürriyet Daily News, Friday, August 12, 2011, Erisa Dautaj Şenerdem, 

Energy imports to Turkey have grown by more than 41 percent in the first half of the year. Domestic supply is the only way to ease pressure, experts say

Turkey’s cost of energy imports increased 41 percent during the first six months of the year compared to the same period in 2010, and experts say domestic energy production is the only way to relieve the pressure.
The country’s energy imports totaled $24.8 billion between January and June, compared to $17.6 billion in the same period last year, according to figures published by TurkStat, the official state statistics institute. The figure includes imports of oil and oil products, natural and seamless gas, electricity, as well as bituminous coal, hard, coking and briquette coal.
The data shows imports of crude oil grew 16.13 percent reaching a volume of 8.8 million tons, in the same period. Turkey imported most of its crude oil from Iran, Iraq and Russia.
Energy is the item that bears the largest weight on the country’s current account deficit, according to Altan Kolbay, the secretary-general of the Oil Platform Association, or PETFORM,  a sectoral organization of 48 energy companies. “Turkey imports 93 percent of the oil and 98 percent of the natural gas it consumes,” Kolbay told the Hürriyet Daily News in a phone interview on Friday. He said this figure had remained almost the same for the past 10 years.

Natural gas imports have increasingly become a concern for the current account, due to a radical increase in demand, thus increasing dependency on imports, he said.
Oil prices have also increased considerably, and Turkey is among countries that cannot affect such prices, which are determined in international markets, Kolbay added.
Recalling that this was a problem for all non-oil producing countries, Kolbay said the only way out of the situation was through domestic production. According to him, this can be realized through encouraging exploration and investments in off-shore regions, trying unconventional production methods, particularly in exploring for shale gas, as well as encouraging enhanced oil recovery methods, which increase production in existing oil wells through certain chemical techniques.
The existing regulation on oil production dates back to 1954 and it must be revised in accordance with the present conditions, Kolbay said. “It must encourage both public and private investments.”
Coal, thermal power plants an alternative
The behavior of energy resource suppliers will always tend toward higher prices, however, the Turkish consumer must have a choice (to say NO), said Haluk Direskeneli, an Ankara-based energy analyst.
“We must use domestic coal and thermal power plants in harmony with environmental norms,” Direskeneli told the Daily News in a phone interview. Nuclear energy takes much more time and there are concerns related to the environment. On the other hand, the country should try to diversify its energy resources (such as Wind/ Solar/ Hydro/Clean Coal), he said.
Private investors have mostly invested in plants that use imported coal, whose international spot price has increased radically (almost double) in recent years, Direskeneli said. “These investors cannot sell energy now, due to very high electricity generating/ operation costs. The state must repair existing coal mines and encourage private sector to invest in these or new plants nearby already existing mines.”

Thursday, August 04, 2011

Offshore Deep sea oil drilling on EastMed

Dear Colleagues,

Under South Cyprus license, Noble Energy (NYSE:NBL) of Houston Texas started offshore oil exploration on 19th September 2011,
It is for sure that Noble energy will be at non-stop risk of nearby Marine war exercises by Turkish Navy all year long, due to unfair share of natural resources between South & North Cyprus
Noble Energy and South Cyprus will be at non-stop risk of abuse and dogfight threat by Turkish Navy and Air Force, in the disputed waters
Company is playing too risky, business environment cannot stand that much sovereign risk
Company has estimated that around 280 billion cubic meters of natural gas lie in wait below the seabed in Aphrodite field.
Noble Energy, Stock Analysis shows Bearish Engulfing Candlestick Pattern – as usual after offshore initiation in the markets. But that is misleading.
Company is pushing all risk limits, bankruptcy could appear in future due to high unforeseen risks, that is an important warning for the shareholders.
Company has started to blame rig for repeated breakdowns and is seeking an alternative deep water offshore drilling platform.
On East Mediterranean, contrary to Aegean sea, dogfight is very easy for Turkish Air Force, but very difficult for Greeks, moreover there is almost no military capability of Cyprus.
This does not mean hot clash, not military confrontation, this could only be simple military abuse, and that is sufficient to stop offshore works.
All in all, any deep-sea offshore oil exploration at Eastern Mediterranean is impossible without prior consent / or approval of Turkish government.
Therefore understanding of respective interests and joint agreement on sharing rights are  necessary between all interested  parties,
All figures/ estimations are predicted in nature, they are all fiction/ unreliable as of today, until verified as proven after expensive deep-sea offshore drilling. 
These offshore explorations are expensive, so operator company may go bankrupt until finding a profitable well.
Please do note that El Paso of USA  had 3 offshore drilling in Iskenderun Bay of East Med and found nothing in near past. Therefore commercial risks are very high. All-risk insurance is very costly.
East Med offshore drilling is not easy, work needs time, effort, money & tranquil waters away from any dispute for fair share of reserves
EEZ of South Cyprus in East Med is Exclusive Military Zone (EMZ) for Turkish Navy & Air Force,
Therefore if Turkish Parliament/ Government does not approve/ certify any legal document, then it is not in international law, such as so-called EEZ in East Med
East Med oil/gas explorations need long-term commitment, work will consume too much resources/ time/ money/ effort for exploration
East Med gas/oil offshore potential is exaggeration of media sources, take your time to get responses from the first drilling, you should be too patient to get results.
Military clash/ conflict is unlikely in East Med, but military abuse is normal, dogfight of War Planes is normal & nobody matches Turkish Navy and Air Force due to close logistics.
Nato members cannot clash, the worst thing could be to freeze all work, which means money lost for the Company in East Med investment.
A commercial company should make risk assessment carefully, it is not so easy to work for offshore drilling in disputed waters of East Med.
South Cyprus politicians look for fast good news for future after Vassilikos disaster, they promote East Med offshore with no concrete/ proven assessment.
Disputed waters of East Med is difficult risk for offshore platform operators, offshore drilling operation requires tranquil environment, it is very hard job for Noble Energy.
El Paso of USA had 3 offshore drilling in shallow waters of Iskenderun Bay in East Med in the past with high expectations, nothing found US$30m lost, now the budget is expected US$200m per deep water platform
East Med is under geographical domination of Turkish Navy. Other neighboring countries are too far to Cyprus. Even Meis island is isolated/ far/ all open for scrutiny.
East Med Offshore gas/oil reserves over optimistic, it is too deep, more than 1500 meters deep sea, plus 2600 meters rock/soil to be drilled.
It is like “Boatmen's quarrel” of Ottoman period in Istanbul where you have no physical contact, but you can only shout to beat your rivals in order to get customers, that is similar to East Med today.
It is unlikely hot clash between Turkey and Israeli or Greek/ Cypriot naval ships in East Med, because democracies do not fight, Nato members never fight with each other.
War of words of politicians is not effective in case of strong presence of Turkish Navy & Air Force in East Med offshore fields, Key is mutual work for fair share.
East Med needs common sense of neighboring countries to tap the resources in fair share, otherwise it is dispute to waste energy.
Your writer may be wrong about the unlikelihood of democracies fighting. The world's total instability right now could prompt huge miscalculations
Your comments are always welcome. With deepest respect

Haluk Direskeneli, Prinkipo based Energy Analyst

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