Turkey to remain dependent on foreign energy sources in 2011



Turkey’s dependence on foreign sources to meet 70 percent of its energy need will continue in 2011.

“If 2011 is to be a successful gas year for Turkey, it needs to get to work by signing agreements on the transfer of Iraqi gas to home and to Europe,” Energy security analyst Faruk Demir said.

Speaking to Anatolia news agency, Demir said Turkey was a shining star with its new investment opportunities and its rapid growth rate, but the country’s biggest economic problem for 2011 and beyond would be reducing energy prices.

Pointing out that only 3 to 5 percent of Turkey’s overall oil and natural gas consumption comes from domestic sources, Demir said the results of the ongoing offshore exploration projects in the Black Sea and the land drilling in the southeastern and Mediterranean regions might give new hope for oil and natural gas production.

He also underlined the importance of construction of nuclear and coal-powered plants and more production of oil and natural gas for Turley’s energy security. “Turkey needs to benefit from the energy resources in its immediate surroundings in a more efficient and realistic way.”

Due to its economic growth and increasing energy demand, Turkey’s energy bill will surpass budget expectations by the end of 2011, Demir said, adding that Turkey needs to get the best of its “gateway position” in order to meet its energy costs and demands.

Demir said the opportunity was still there for Turkey to have a cheaper price advantage in the Nabucco project, which would transfer natural gas from the Middle East and the Caspian region to Europe via Turkey.

Admitting that Azerbaijan-Turkey Gas Protocol could not offer a good opportunity for the renewal of previous contracts, Demir said there was still a chance for signing a contract for the 13-14 billion cubic meters of gas expected to be released as part of Shah Deniz Phase II in 2012 at the earliest.

Demir said he expected 2011 to be the year to conclude the Nabucco debate, for good or bad.

“It has now become a strategic choice for Azerbaijan to form a multi-marketed structure with multiple, though few, options, rather than a project like Nabucco or ITGI. If the gas price advantage for Nabucco is not going to happen through the Azerbaijani channel, which seems to be the case, Turkey’s best choice is to focus on Iraqi gas.”

Evaluating the recent price hikes in oil in the global markets, Demir said the geopolitical risks in the Persian Gulf due to Iran and other problems and the tension in the Asia Pacific could put severe pressure on oil prices.

Demir said oil prices, hovering above $90 per barrel, could go well beyond this and it seemed very unlikely that it would stay around the present level for long, adding that he predicted prices would fluctuate in the $90-$120 band in the second half of 2011.

Demir also said Iraq could be a significant actor in the oil markets in terms of production increase and demand surplus only after 2015.


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