Published by:  Anadolu Agency
Date: 26 June 2014 

The Bosphorus Energy Club is to bring together world’s energy actors to discuss game changing developments


Turkish energy interest group, The Bosphorus Energy Club will bring together representatives from government and private sector throughout the world on Friday.

The Bosphorus Energy Club, (BEC) based in Istanbul and founded last year, is an organization works by exclusive membership principle, gathering key representatives of world energy sector, serving as a Track-II energy diplomacy channel as well as a discreet summit of the top decision-makers for regional issues and projects.

BEC will hold its second annual meeting on 27 June in Istanbul with the participation of government and private sector representatives from the US, Britain, Russia, Ukraine, Iran, Iraq’s Kurdish Regional Government, Yemen, Afghanistan, Turkish Republic of Northern Cyprus (TRNC), Greece, Jordan and Kosovo.

The meeting entitled “Game Changers: Energy, Investment and Geopolitics” will open with a speech by Turkish energy minister Taner Yildiz.

Head of the BEC, Mehmet Ogutcu spoke to Anadolu Agency on Thursday before the meeting, and explained the target of the meeting.

“Turkey takes place in the center of energy dynamics and transformations from Islamic State of Iraq and Levant’s (ISIL) progress towards energy and water resources in Iraq to Russia’s taking over of most of Ukraine’s offshore fields,” Ogutcu said.

Highlighting the free discussion opportunity created by the BEC, Ogutcu said even Russian and Ukrainian boards will come together and settle their accounts.

“Russia will decrase gas price”

Gazprom’s Pricing official Sergey Komlev will also participate the meeting, said Ogutcu, adding that price reductions of Russian gas will be one of the hot topics of Friday’s meeting.

“I believe Russia will decrease the price of gas it sells to Europe, then to Turkey,” he said.

Ogutcu emphasized one of the aims is to strengthen the energy cooperation among US-Europe-Turkey, as Turkish energy sector will need US$ 150 billion for the next ten years.

Ogutcu also said, to realize its goal of being energy hub, Turkey should establish an energy fund.

The government can make the initial contribution with US$ 5-6, and the rest will come from international investments.

“Kurdish oil will take its place in world market”

Asked his opinion about the controversy between Iraqi central government and autonomous Kurdish region on the sale of Kurdish oil to international markets via Turkey, Ogutcu said, Baghdad won’t strictly oppose it any more considering the ISIL threat.

The Islamic State in Iraq and Levant (ISIL) and its allies have splintered the Iraqi government’s control of the country when they seized Iraq’s second-largest city Mosul and its surrounding area on June 10. As they seized the Baiji refinery, the largest oil refinery in Iraq, Kurdish Regional Government (KRG) declared they built a link connecting Kirkuk to its newly-built pipeline to Turkey, which enables the Kurds to export Kirkuk oil through their own network independently from Baghdad.

Iraq’s federal government and the Kurdish Regional Government have long-standing disagreements over the agreement with Turkey to allow the sale of oil through Turkey to the international market, without going through Iraq’s national oil regulator.

Northern Iraqi oil began shipment from Turkey’s southern Ceyhan Port to international markets on May 22, prompting Baghdad to appeal for international arbitration against Turkey and a demand the immediate halt to the oil trade.

The first shipload fee of $93 million was invested in Halkbank.

Ogutcu said, Turkey established a transparent system to transfer the oil revenue to Baghdad and Erbil in accordance with Iraqi constitution.

According to the constitution, 17 percent of the oil revenue goes to Erbil and 83 percent to Baghdad.

About the rising oil prices because of the situation in Iraq, Ogutcu said, contrary to some claims, I don’t think that the prices will reach US$ 200, but will stay between US$ 100-115 margin.

“Small window of opportunity for Eastern Mediterranean gas might close”

Ogutcu touched upon Eastern Mediterranean gas, and said, small window of opportunity for Eastern Mediterranean gas might close, if no investment is done within 6-8 months because of lack of capital and controversies on price of tenders.

Looking from Israel’s perspective, a pipeline through Turkey to export their gas is seven times cheaper than other pipeline projects considered in the region, Ogutcu said.

The Leviathan gas field off the coast of Israel is a major gas hub in the region that has been recently discovered. The reserves hold nearly 600 billion cubic meters of gas.