TBY talks to Taner Yıldız, Minister of Energy and Natural Resources, on the future of the energy market, and Turkey’s role as a transit hub.
TBY What role does Turkey play in Europe’s energy security?
TANER YILDIZ Turkey is of strategic importance because it connects the Caspian region, Central Asia, and the Middle East with Europe. In the 21st century, energy has become a key factor in the determination of foreign policy objectives. Turkey sees solidarity, trust, dialogue, and cooperation as being the foundations of a worthy foreign energy policy. We pursue an active foreign policy when it comes to energy supply security. We conduct meetings that solidify this position as an important player at both a regional and global level. As a result of projects undertaken by the AK Party government, such as the Baku-Tbilisi-Ceyhan Pipeline (BTC), Nabucco, the Turkey-Greece-Italy Natural Gas Pipeline, and Shah Deniz, Turkey is well on its way to becoming a major energy corridor and terminal. Turkey and Europe must stand together when it comes to energy. Europe needs Turkey, and Turkey needs Europe.
What changes has the Nabucco project undergone until now, and can you give us a rundown of any new developments regarding the project?
The Project Support Agreements (PSA) that had been prepared for the Nabucco Natural Gas Pipeline Project, which will carry natural gas from the Caucasus and Caspian regions to Europe via Turkey, were recently signed at an official ceremony in Kayseri. International projects of this magnitude can sometimes present threats, while at other times they can offer unique opportunities. It’s important to keep moving forward and not become disillusioned. If we believe in this project—and we do—then we must continue developing it. We must do the necessary technical work. Keeping in mind the recent financial crisis, I truly believe that this project will be of great benefit to all participating countries, especially in terms of creating new jobs. The next step is to conclude financial negotiations and agreements with producer countries.
In terms of meeting Turkey’s energy needs, what steps do you think need to be taken in both the public and private sectors, bearing in mind the country’s developing economy and growing population? What role do you think nuclear and renewable energy should play in Turkey’s future?
Turkey is continually growing. Naturally, the demand for energy is also growing parallel to Turkey’s economic growth. We need new investments in order to be able to meet these needs. We need a more liberal and competitive energy sector. That’s why we’ve implemented the necessary changes to pave the way for the private sector to move into the energy sector. As a result of these policies, 52% of the energy sector is now privatized. Our goal is to bring that figure up to 75%. After privatization, services will become more efficient and output will become more productive. We are continuing to take the necessary steps to develop a truly competitive and free energy sector. We have been utilizing our local and renewable resources. We’ve increased exploration endeavors, and we have several maritime exploration projects in partnership with some of the world’s largest companies. Our goal is to utilize all of our local renewable energy reserves and resources. Hydro, wind, solar, and geothermal energy sources are all being put to use. Unfortunately, these don’t suffice in meeting the exceptional needs of a growing Turkey, and that’s why nuclear energy is not just an option for Turkey, it is a necessity. Our work on building nuclear plants in Sinop and Mersin Akkuyu continues. The two 10,000 MW nuclear plants will hopefully be completed by 2023.
What are your expectations for the fourth round of tenders in Iraq and from the natural gas fields in the Siba and Mansuriyah regions? What is Turkey’s role in the development of Iraq’s oil and gas industry?
We place great importance on our relations with Iraq. TPAO and other Turkish companies are doing their utmost to help develop and stabilize the Iraqi oil sector. We’ll do the necessary work and preparations to get Turkish companies ready for the fourth round of tenders in Iraq. We are interested in all the fields on offer, whether as private companies or as the public sector. Our involvement in Iraq looks like it will continue to grow. I think our efforts will not only help normalize Iraq, but also further strengthen relations between our two friendly, brotherly, and neighborly nations.
What does Turkey offer potential investors in the energy sector?
Businessmen and women need to invest their money and experience in the energy sector. As the government, we have given the necessary guarantees and received very positive responses. That is why we must turn this sector into a golden opportunity. We have opened the way for investors with our policies, and we will continue to do so. The energy sector is one that will draw more and more investments. We made a number of amendments to the purchase guarantee system in the recent Renewable Energy Act. Some $14 billion has been invested in the energy sector over the last three years, despite the crisis period. This is a sign of the trust that investors have in Turkey, whether local or foreign. Thanks to its political and economic stability and growth, Turkey has become a magnet for both local and foreign investors, a place they feel secure in, and a place where the necessary energy investments have been realized and will continue to happen.
© The Business Year