Summary from the Executive Chair

1. The second meeting of The Bosphorus Energy Club took place at Sait Halim Pasha Palace on 27 June 2014, earlier than its usual annual meeting because of the critical recent developments in the region ranging from Russia’s annexation of Crimea and its energy-geopolitics implications in the Black Sea to how the future of oil hangs on Iraqi politics, from the narrow window of opportunity in the East Med
gas to Turkey’s natural gas market liberalisation, from Iran’s anticipated re-engagement with the West to
the next steps in the Southern Gas Corridor.

2. The meeting provided an opportunity to hear first-hand what’s happening in our region and how these developments will affect our government and business decisions.

3. The 27th June meeting hosted around 90 Club members and special guests including prime minister and ministerial level leaders, the event also benefited from insights offered by energy business executives, bankers, Think-Tanks and experts from China, Ukraine, Russia, Belgium, Switzerland, Italy, Iran, Kazakhstan, Azerbaijan, Egypt, Israel, the US, the UK, North Cyprus, Greece, Kosovo, and Yemen
Bulgaria, Turkey and France.

4. Once again, the Club provided a privileged platform for substantive discussions, moderated in a freewheeling and interactive manner by its Chair, while at the same time bringing together leading energy experts from around the world to promote a broad understanding of regional energy issues and chart future actions. There was also an extensive discussion on purpose-driven leadership in the new era and
how to groom future leaders and executives in the region’s energy sector.

5. Dozens of bilateral government-to-government, government-to-business and business-to-business meetings (as
well as exclusive media interviews) were arranged by the Club on the margins of the meeting. Of particular
significance were the engagements with inter alia:

  • TRNC Prime Minister Özkan Yorgancıoğlu,
  • Yemen’s Deputy Prime Minister Abdullah Mohsen al-Akwa,
  • Turkey’s Minister of Energy and Natural Resources Taner Yildiz,
  • UK’s former Conservative Party Chairman (and 13th Marquess of Lothian) Michael Ancram,
  • U.S. Deputy Energy Secretary Daniel B. Poneman,
  • Former U.S. Assistant Secretary of State David Merkel,
  • Greece’s former Minister of Economy and Finance Yannis Papantoniou,
  • Kosova’s Minister of Economic Development Fadil Ismajli,
  • Chevron’s Vice President of Europe, Eurasia and Middle East E&P Ian MacDonald,
  • Schneider Electric’s Europe, Middle East and Africa President Franco Restelli,
  • Gazprom’s Head of Pricing and Contract Structuring Department Sergey Komlev,
  • ROSATOM’s Akkuyu NPP CEO Fuad Namikovich Akhundov,
  • Norton Rose’s Partner Chris Brown,
  • Egon Zehnder’s Head Andrew Roscoe,
  • Strand Investment Partner’s Director Amin Ajami,
  • Ukrainian Prime Minister’s former advisor Jaroslav Kinach.

6. According to Club rules, media were permitted only during the opening session for a photo opportunity. A
briefing prior to the event was provided to select media members. Chatham House rules allowed for the discussion
of some “taboo” and commercially/politically sensitive issues in a discreet manner

7. The event photos, the list of speakers and discussants, publicly available documents and a list of media reports and
TV interviews can be accessed via

  • Energy, investment and geopolitics have never been so intertwined in recent history than they are in our region today. Despite a series of significant geopolitical tensions, oil prices have remained flat and indeed continued to decline as the markets are better prepared to deal with such risks and setbacks.
  • The “Islamic State” (IS) spreading into Iraq and Syria represents a serious security risk to the whole region. It emanates from the ongoing frustration with both the Syrian and Iraqi leadership of Assad and al-Maliki (now resigned), and its intention is to create a viable Sunni State with sizeable energy, water resources and reliable infrastructure in place.
  • A de facto disintegration of Iraq into Kurdish, Sunni and Shia portions is underway although hopes are not totally lost for a sui generis unity government. Turkey is set to remain a key force for making sure that hydrocarbon exports and regional security will benefit all Iraqis.
  • Russia’s annexation of Crimea has upset the regional balance in CIS and the Black Sea and is now seen as part of a bigger game on the global scene. This has serious implications for the energy sector.
  • In view of new supplies coming on-stream from elsewhere in 2017 and hub-based pricing being increasingly deployed, there will be further pressure on Russia to reduce gas prices and to stop leveraging energy as a weapon in its relations with its “near abroad” neighbours. The last is set to step up pressive on Russia.
  • Companies and governments that need front-runners with global mindsets and leadership skills have to reassess their strategies for retaining what they have, as well as developing a second line of leaders, particularly in the energy sector.
  • Iran’s re-engagement with the West and more conciliatory overtures will likely bring this nation out of isolation, thus creating new opportunities, competition and possible tensions in the region. We need to reconsider how to work with Iran on energy projects and develop new ways of collaborating, particularly in the post-sanctions era.
    Iran should follow suit.
  • There will not be a rush of IOCs to Iran after the lifting or relaxing of the sanctions. Yet, the potential to increase
    oil and gas production and exports is immense–enough to call Iran a new “game-changer”. Nonetheless, the shortterm
    implications for the region will be limited.
  • Azerbaijan’s commitment to the Southern Corridor through Shah Deniz-II, TANAP and TAP investments and the significant FDI in Georgia, Turkey and Greece have planted the seeds of a lasting win-win partnership with its neighbours and Europe. SOCAR has emerged as a regional powerhouse in energy, investment and trade. There are still, however, risks to mitigate in this volatile region including for energy production, transportation and physical security.
  • The Turkish government will continue to further liberalise its gas markets and prices, and will gradually phase out subsidies that distort the level-playing field in the highly attractive and rapidly growing Turkish gas market. Contract transfers from BOTAS are still on the agenda for traders who bring attractive deals from suppliers. The unbundling of the BOTAS operations is soon to be realized, with production, transmission and distribution being reorganized under separate corporate entities.
  • Declining levels of investment in the energy sector contrast with the pressing need for the replenishment of supplies and the proliferation of infrastructure consistent with higher growth in energy demand. There is a need to tap into new unconventional sources of finance for new energy projects and to expand existing ones.
  • The new generation of leaders in the energy sector is a scarce resource. There is a need to groom young executives, who innovative in their way of working and thinking. Companies and governments need front-runners with global mindsets and leadership skills who will reassess their strategies for retaining what they have, as well as developing a second line of leaders, particularly in the energy sector.

At the conclusion of The Club’s deliberations, it was agreed to take the following steps:

  • Organise a members-only Club meeting in the autumn to discuss the future direction of the Club and its priorities;
  • Focus on fresh sources of funding and investment for energy deals and projects at the Club’s next flagship meeting;
  • Consider developing for an energy executive leadership programme tailored for members needs;
  • Support Turkey’s hosting of the 10th G-20 heads of government summit in 2015, the next World Energy Council meeting in 2016 and the 22nd World Petroleum Congress in 2017, as per Minister Yildiz’s request; and
  • Plan to convene one of the next meetings of The Club in Washington D.C., Moscow, Tehran, Athens, London,
    or possibly in a regional capital.



 Download to the all report: BEC No2