The Bosphorus Energy Club: How and from where to raise fresh funding for energy projects and deals?11/27/2014 • 5:02 pm
Date: 11 December 2014 – Thursday
Venue: Sait Halim Pasha Palace, Yeniköy, Istanbul
Moderator | Mehmet Öğütçü, Executive Chair, The Bosphorus Energy Club
08:00-09:00| Registration and warm-up conversations
Tour d’horizon of major energy developments
- Taner Yildiz, Minister of Energy and Natural Resources, Turkey, and Honorary Chair, The Bosphorus Energy Club
- Ashti Hawrami, Minister for Natural Resources, KRG, Iraq
- Qasim Mohammad Abid Hammadial-Fahadawi, Minister of Electricity, Iraq
Speakers are expected to approach their topic in a conversational and concise style (no prepared presentations). 5 to 7 minutes for each remark, followed by Q/A with the panel and audience.
- Global investment outlook for energy projects and deals, Ian MacDonald, Vice-President, Europe, Eurasia and Middle East Exploration and Production, Chevron
- Investment needs and protection for Eurasian energy projects, Urban Rusnák, Secretary-General, Energy Charter, Brussels
- The need for massive investment and financing for Turkey’s energy industry and deals, Kenan Yavuz, CEO and President, SOCAR Turkey
- Financing nuclear energy: Challenges and solutions, Fuad Akhundov, CEO, AkkuyuNuclear JSC
- Arranging the best means of funding, Mehmet Ali Neyzi, CEO, STFA
11:00-11:15 | Fruit break
Financing major regional energy projects and deals
Southern Gas Corridor: Progress and where will $45 billion come?
- Kenan Yavuz, Chief Executive Officer and President, SOCAR Turkey
- Besim Sisman, Chairman and CEO,TPAO
- David Merkel, former Assistant Secretary of State, Director, National Security, United States
- Vugar Farman Aliyev, Managing Partner, KPMG, Azerbaijan
Enhanced roles of Iran, Iraq and Afghanistan in Energy
- Seyed Ali Mohammad Mousavi, Secretary General of the D-8 Organisation for Economic Co-operation
- Mehmet Sepil, President, Genel Energy plc
- Ali Fuat Taşkesenlioğlu, Chief Executive Officer, HalkBank
- Mohammad Daud Yaar, Ambassador of Afghanistan to UK Afghanistan
What’s new in the Eastern Mediterranean?
EvangelosMytilineos, Chairman & Chief Executive Officer, Mytilineos Holdings S.A. Greece
- Erdal Aksoy, Chairman, Turcas
- Malek Kabariti, former Minister of Energy and Mineral Resources, Hashemite Kingdom of Jordan
13:00-14:00 | Lunch break
14: 00 – 15:30
Russia: New strategic moves
Sergei Komlev, Head of Contract Structuring and Price Formation Directorate in Gazprom Export, Russia
- Fatih Baltaci, President and CEO, Akfel
- David Kotler, CEO, Delta International Group, Saudi Arabia
- Shamil Yenikeyeff, Director, Oxford International Centre
- Jaroslav Kinach, Former advisor to the Prime Minister of Ukraine
Southeastern Europe: Regional energy networks
- Haydar Colakoglu, Board Member, Colakoglu Group, and Chairman, EgeGaz
- Julian Popov, former Minister of Environment and Water, Bulgaria
- Yannos Papantoniou, former Minister of Finance and Economy, Greece
15:30-15:45 | Fruit break
Turkey’s energy investments: where to find $120 billion over the next decade?
- Hakan Ates, CEO, Deniz Bank
- Financing commodity trading, Ruya Bayegan, CEO, Bayegan
- Investing in renewables and future funding requirements, Gurbuz Gonul, Director, Country Support and Partnership Department, International Renewable Energy Agency, United Arab Emirates
Messages and proposals: “How to raise fresh funding and source favorable finance for existing and future energy projects and deals? Is a dedicated energy fund feasible with seed capital from governments?”
- James Emmett, CEO, HSBC Turkey
- Gary Neville, CIO, InfraTurk Fund
- Jambulat Sarsenov, Vice-Chairman, Kazakhstan Association of Oil, Gas and Energy Sector Organisations
- Murat Yazici, Managing Partner, Yazici Law Firm
- Sefa Aytekin, Board Member, BOTAS, and Deputy Undersecretary, Ministry of Energy and Natural Resources
Private dinner meeting (only for the Club members and Ministers by invitation to discuss the Club’s strategic orientations for 2015, the recent Russian gas proposal and Turkey’s natural gas market dynamics.)
B2B and G2B meetings
Upon request, the Club is delighted to facilitate bilateral business and government engagements during and after the meeting.
Main Issues for Discussion
Overview| $48 trillion of cumulative investment in energy are required by 2035, an average of $1.5 trillion per year: $23 trillion in fossil fuel extraction, transport and oil refining; almost $10 trillion in power generation and a further $7 trillion in transmission and distribution.
Shares of the major fossil fuels in the global energy mix are converging, with oil, gas and coal each to make up around 27 percent by 2035, with the remaining coming from nuclear, hydro and renewables.
In this context, Eurasian energy space requires massive amounts of investment to replace aging facilities and adding more to meet the growing demand.
For instance, Russia has to invest $793 billion in the energy sector to 2035. Iran is enticing further international investment for its numerous projects. Iraq, Syria, Libya and Afghanistan need reconstruction funds for post-conflict energy and infrastructure. The $45 billion Southern Gas Corridor is in progress. Turkey seeks $120 billion for its own energy and related infrastructure over the next decade.
East Med’s resources will be unlocked only if investment decisions can be made in a timely fashion. KRG has to make final investment decision soon on gas exploration and mid-stream. New smart grids and resource efficiency projects are required across the region, as well LNG and storage facilities. The wind and solar landscape has changed significantly. Clean energy will attract $6 trillion in investment between now and 2035.
Issues for discussion
Club members and special guests drawn from the world of energy, finance and investment are convened to discuss, inter alia:
- How will Russia’s recent proposal to scrap the South Stream and create a new gas hub on the Turkish-Greek border transform the regional gas map?
- Why have dozens of public and private institutions have decided to divest fossil fuels from their portfolios? What are potential alternatives for investment re-allocated from oil, gas, and coal stocks towards low-carbon energy sources?
- What is the magnitude of major energy projects, i.e.TANAP, TAP, TAPI, Central Asia projects, Russia’s investment programme, Iran’s massive pipeline, petrochemical, upstream and power projects, new KRG energy facilities, East Med LNG and pipelines, South East Europe Transmission Network, refineries, gas storage facilities and possible M&A deals in the region?
- What types of non-traditional fresh funding sources exist for the increasing number of new energy/infrastructure projects and M&A deals in the region? What role could Energy Exchanges and trading houses possibly play?
- Where will the additional funding come from in realising Turkey’s huge energy import bill and investment needs in energy?
- Proposed actions including the possible creation of an energy fund to provide seed capital for the region’s projects and deals?
Date: 11 December 2014 – Thursday
Venue: Sait Halim Pasha Palace, Yeniköy, Istanbul
– The first session –
“Tour d’horizon of major energy developments”
TANER YILDIZ, Minister of Energy and Natural Resources, Turkey, and Honorary Chair, The Bosphorus Energy Club
MEHMET ÖĞÜTÇÜ, Executive Chair, The Bosphorus Energy Club and President, Global Resourges Partnership
Qasim Mohammad Abid Hammadi al-FAHADAWI, Minister of Electricity, Iraq
IAN MACDONALD, Vice-President, Europe, Eurasia and Middle East Exploration and Production, Chevron
URBAN RUSNAK, Secretary General of the Energy Charter Secretariat
KENAN YAVUZ, President and CEO of SOCAR Turkey
FUAD AKHUNDOV, CEO, Akkuyu Nuclear
MEHMET ALİ NEYZİ, CEO, STFA
– 2nd session –
“Southern Gas Corridor: Progress and where will $45 billion come?”
KENAN YAVUZ, President and CEO of SOCAR Turkey
BESİM ŞİŞMAN, CEO, Acting Chairman of the Board, TPAO
DAVID MERKEL, Managing Director, Summit International Advisors (and former U.S. Assistant Secretary of State and Director at National Security Council)
VUGAR FARMAN ALIYEV, Managing Partner of KPMG, Azerbaijan
– 3rd session –
“Enhanced roles of Iraq, Iran and Afghanistan in Energy”
MEHMET SEPİL, President, Genel Energy plc, Turkey
SEYED ALİ MOHAMMAD MOUSAVI, Secretary General of the D-8 Organisation for Economic Co-operation
MOHAMMAD DOUD YAAR, Ambassador of Afghanistan to the UK
– 4th session –
“What’s new in the Eastern Mediterranean?”
EVANGELOS G. MYTILINEOS, Executive Member, Chairman and Managing Director
ERDAL AKSOY, Chairman, Turcas
MALEK KABARITI, former Minister of Energy and Mineral Resources, Hashemite Kingdom of Jordan
– 5th session –
“Russia: New strategic moves”
SERGEI KOMLEV, Head of Contract Structuring and Price Formation Directorate in Gazprom Export, Russia
M. FATİH BALTACI, Chairman of the Board, Akfel Group, Turkey
DAVID KOTLER, Managing Director, Head of Energy EMEA, Morgan Stanley, Investment Banking Division
SHAMIL YENIKEYEFF, Director, Oxford International Centre
JARASLAV KINACH, Former advisor to the Prime Minister of Ukraine, and President, Iskander Energy Corp, Ukraine
– 6th session –
“Southeastern Europe: Regional energy networks”
HAYDAR ÇOLAKOĞLU, Vice Chairman, EgeGaz A.Ş
JULIAN POPOV, Fellow of the European Climate Foundation, Chairman of the Board of Directors of the Buildings Performance Institute Europa and Energy Security Adviser of the President of Bulgaria, former Minister of Environment of Bulgaria
YANNOS PAPANTONIOU, former Minister of Economy and Finance, President of the Centre for Progressive Policy Research
– 7th session –
“Turkey’s energy investments: Where to find $120 billion over the next decade?”
HAKAN ATEŞ, President and CEO, Denizbank
RÜYA BAYEGAN, Vice Chairman & Board Member, Bayegan Group
GÜRBÜZ GÖNÜL, Acting Director, Country Support and Partnership Dept., Senior Programme Officer – Regions, International Renewable Energy Agency (IRENA)
– 8th session –
“Messages and proposals: “How to raise fresh funding and source favorable finance for existing and future energy projects and deals? Is a dedicated energy fund feasible with seed capital from governments?”
November 2014 | Prepared for Bosphorus Energy Club
Low oil prices for two years – five outcomes of an $ 80 Brent world
Since June 2014 oil prices have fallen from highs of $116 per barrel to $80 per barrel. Our H2 2014 forecast expects oil prices to stabilise and rise moderately from the current low levels next year, however there is a material risk that oil prices could stay lower, for longer. Here, in a sensitivity to Wood Mackenzie’s base case, we illustrate five likely outcomes of two years at $80 per
barrel Brent / $70 per barrel WTI.
Russia is vulnerable to oil price fluctuations, but the timing of the current slump could not be more problematic, as EU and US sanctions begin to bite. Russia’s economy could contract by up to 2.5% in 2015, but Vladimir Putin will remain secure. The President’s popularity at home is soaring and it would likely take serious hardship in Russia for this to change.
In the Middle East, Iran faces the prospect of a double impact of no sanctions relief just as oil prices settle into a structurally lower range. In Iraq, low prices threaten long-term production growth but could represent an opportunity for China to further extend its influence in the region. Saudi Arabia may favour low oil prices now, but longer-term will have to balance the conflicting incentives of maintaining market share in Asia, and unwillingly providing opportunities for other producer countries in the region.
Corporates will suffer, with the largest 60 companies’ cash flow falling to a deficit of US$90 billion, versus a surplus of US$70 billion at US$100 per barrel. This will postpone the positive cash flow inflection we had anticipated for many of the independents, and will exacerbate pressures on the Majors. Tight oil producers in the United States will also have to adapt, but investment and production will shift geographically rather than decline overall. Weakening oil prices are so far, not a material threat to US tight oil or the industries that surround it.
For energy importing economies in Asia Pacific, the positive impacts are stark. China pays less (in domestic currency) for its oil in 2015 than it did in 2010, when import demand was far lower. India benefits even more, in relative terms, with the cost of oil on a per barrel basis offsetting much of the fall in the value of the rupee in recent years.
Two years of Brent at $80 per barrel would represent a significant boost to the global economy, but it would also accelerate the commodity cycle. The final consequence of a period of $80 per barrel Brent is that it would be followed by a sharp recovery in oil prices. Rewards will be there for those who have been able to weather the storm.