UPSTREAM SUCCESS

Turkey 2013 | ENERGY & MINING | INTERVIEW

TBY talks to Bud Fackrell, President of BP Turkey, on the company's role in the local energy market, community involvement, and gas export potential.

Bud Fackrell
BIOGRAPHY
Bud Fackrell has a BS in Petroleum Engineering from the University of Wyoming, and has 37 years of experience in the oil and gas industry, mainly overseas in executive roles in upstream and midstream areas. He was appointed President of BP Turkey in April 2012.

How has BP's role in the Turkish market grown and developed over the past century?

BP has been in Turkey for 100 years, and we celebrated our centennial in 2012. BP's predecessor, the Anglo-Persian Oil Company, opened an office in Istanbul—then the capital of the Ottoman Empire—back in 1912. Our current downstream businesses, such as fuels and lubricants, date back to the 1940s. We are one of Turkey's first international investors. Having contributed to Turkey's economy and energy sector for more than 100 years, we have witnessed considerable growth in the country. Turkey has gone from being a small economy in the region to the world's 17th largest economy and a major regional economic and political power. Geopolitically, Turkey's location provides it with many advantages. Strategically located on the historic Silk Road, Turkey now has become an energy bridge between the producers of energy in the East and the consumers in the West. BP, for many years, has been the only international oil company that has both an upstream (exploration and production) and a downstream (refining and marketing) presence in Turkey. We have a large fuels presence in Turkey, with over 620 dealer-owned stations and a turnover of $4.5 billion. Our fuels business is usually second or third in market share in the regional markets where we participate. We plan on opening another 30-40 stations in 2013. We are also an important player in LPG autogas, which is sold at BP-branded stations. BP's lubricants business has a leading market share in Turkey's automotive lubricants market with the Castrol brand (30%) and the second largest market share overall. Our lubricants blending plant in Gemlik is one of the world's most modern, high-tech lubricants facilities. From here, we export lubricants to countries such as Azerbaijan, Kazakhstan, and Georgia. In addition to our downstream businesses, two of BP's globally strategic projects go through Turkey: the Shah Deniz gas value chain and the Baku-Tbilisi-Ceyhan (BTC) Pipeline.

How does BP integrate community investment into its operations in Turkey?

Contributing to the economy and the well being of the communities we work in is one of BP's highest priorities and is an essential part of our job. BP's social investments aim to support development programs that create a meaningful and sustainable impact—one that is relevant to local needs and aligned with BP's business. We work with local authorities, community groups, and specialists to deliver these community programs. Our direct spending on community programs worldwide in 2012 was $90.6 million, which included contributions of $31.7 million in the US, $16.3 million in the UK, $2.3 million in other European countries, and $40.3 million in the rest of the world, including disaster relief. Since 2002, BP and its partners have invested $27 million in community investments along the BTC Pipeline in Turkey alone, making this the largest social investment by a private sector company in Turkey.

What trends can you foresee in Turkey's oil and gas sector over the medium term?

Supplying sustainable oil and gas for its booming economy over the coming decades is one of the greatest challenges for the country. We expect Turkey to continue exploring for oil and gas in strategic areas such as the Southeast, Black Sea, and Mediterranean regions. Turkey's main aim is to reduce its dependence on energy imports, and find sources of cheap, abundant, and reliable energy. There will be an increased focus on securing supplies from neighboring countries in the region, and becoming an energy bridge, where these supplies are not just consumed in Turkey, but are transported via Turkey onto Europe. In order to unlock the massive gas export potential of the Caspian, Turkey is clearly the key. All the different future sources of gas have to transit through Turkey, and this provides a unique opportunity for both Azerbaijan and Turkey. BP and its partners in Azerbaijan are developing a giant gas project, Shah Deniz Phase II, which will open up the Southern Corridor and, for the first time in history, deliver gas from the Caspian Sea to Europe.