Embassy Information

Article by Ambassador of the Russian Federation to Turkey Vladimir IVANOVSKIY published in The Diplomatic Forum, Spring 2009

On the prospects of Russian-Turkish energy cooperation

Recent Russian-Ukrainian gas crisis that threatened energy supply to a number of European states, including Turkey, had even more sharply raised a question about necessity of more thorough approach to energy security and energy supply routes diversify. Russian-Turkish energy cooperation has been the subject of increased attention and keen debate in the Turkish mass media. Opinions of political scientists quite often full of emotional evaluations in connection with the so-called Turkey's excessive energy dependence on Russia, while our cooperation is based exceptionally on pragmatism and respect of mutual interests and economic rationality. Let us look at the situation more objectively and impartially.

Cooperation the energy sphere of course is a key factor in Russian-Turkish relations over the years against the background of strengthening the role of the energy factor in international policy. Naturally, the neighbor and friendly countries like Russia and Turkey are cooperating in the strategically important for both sides field. To do this, there are all objective preconditions: one of these countries owner of considerable reserves of energy resources along with developed energy complex, the other feels growing need for energy for growing economy and increasing its energy potential, using its favorable geographical location for energy resources transportation through the country.

I would like to share some figures to clarify the issue. Today Russia covers two thirds of Turkeys natural gas requirements in 2008 the volume of natural gas delivery reached 23.8 billion cubic meters. In 2009 it would grow up to 25.5 billion cubic meters. In general, energy commodities (natural gas, crude oil, products and coal) have 70% share in Russias export to Turkey.

It is clear that the energy part of bilateral relations has priority value, especially it has become one of the main topics during the successful visit of the President of the Republic of Turkey Abdullah Gl to Russia in February, 2009. The Joint Political Declaration on advancement to a new phase of relations between the Russian Federation and the Republic of Turkey and further deepening of friendship and multidimensional partnership signed during the visit opens new opportunities for energy cooperation and provides a possibility for a strategic partnership in this field.

Practically parties support development of present relations and cooperation between relevant authorities and organizations in all fields of energy sector and its diversification by carrying out significant projects. Particularly, one could allow Turkish companies to make investment to exploration of resource fields in Russia. As for Russian investors they expect to enter into infrastructure projects, perform of contractors work for new energy facilities in Turkey and participate in privatization of existing ones.

These are the main principles of our proposal to expand bilateral cooperation in the energy sector. During Minister of Energy of the Russian Federation Sergey Shmatko and Gazprom Chief Executive Officer Alexey Millers visits to Turkey as well as during the session of the Russian-Turkish Intergovernmental Commission on trade and economic cooperation we are going to continue our discussion with Turkish partners some specific parameters of cooperation.

There is a new opportunity for fruitful cooperation between two countries in the field of nuclear energy. Russian-Turkish consortium of JSC Atomstroiexport, JSC Inter RAO UES and Park Teknik Ltd. is the only bidder to have its price offer for the construction of the first Turkish nuclear power plant in Mersin is under evaluation of tender commission. Project is based on 100% private investment to construction of the nuclear power plant, its operation and the selling electricity to the governmental authorities. If the Turkish government accepts this offer, the construction of the nuclear power plant will be the largest Russian investment project to Turkish economy. If Russian-Turkish consortium win the tender it will expand opportunities for cooperation in related fields (subcontractors work for the equipment for nuclear power plant).

Oil sector is another attractive part of the Turkish economy. Besides delivery to Turkey of crude oil by Tatneft company another Russian big company Lukoil has bought 100% of shares of Turkish company Akpet Ltd., whose assets include 700 fueling station, 8 company-owned storage and distribution facilities, 5 LNG storage and motor oil factory. Total amount of the deal reached $ 555 million. As a result, the total number of Lukoil owned fueling stations in Turkey exceeded 770 units. In the short term the Russian company aims to increase its share of petroleum product market up to 10%.

In the same time the delivery of electricity from Russia to Turkey can be a new trend of the development of multidimensional energy cooperation. In December, 2008 TGR Energy company, owed Inter RAO UES, got permission for import electricity to Turkey through Georgia. There are some possibilities to import electricity produced by Russian companies in Bulgaria.

All these facts show mutual interest of both Russia and Turkey in long term and fruitful cooperation in the energy field, which is, in fact a main link of the dynamic Russian-Turkish trade and economic relations. As the result one can certainly conclude that the necessity to expand bilateral cooperation in the field of direct delivery and transit of energy resources to Turkey, as well as acceleration of works on new long-term projects became not only area of possible interactions but an objective reality for both countries which brings them together ever more.

H.E. Mr. Vladimir IVANOVSKIY

Ambassador Extraordinary and Plenipotentiary of the Russian Federation to the Republic of Turkey