Investment Support and Promotion Agency of Turkey
TURKISH ENERGY INDUSTRY REPORT
AUGUST 2010 DECEMBER 2009
1. 2. 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 Executive Summary Sector Overview Global Sector Oil Natural Gas Coal Nuclear The Domestic Sector Sector Overview Electricity Oil and Gas Coal Nuclear Main Players 3 4 4 5 5 6 7 7 7 8 12 13 14 14 14 16 17 19 20 25 26 27
188.8.131.52 Electricity 184.108.40.206 Oil and Gas 2.3 2.4 2.5 2.6 Sector Outlook SWOT Analysis Investment Opportunities Sector Establishments and Institutions
List of Figures Abbreviations
The Turkish energy sector is widely seen as the most promising and attractive field of investment in the Turkish economy. The market experiences a transition into a competitive market structure in order to attract private sector investments. The energy market is witnessing rapid growth and liberalization process with the recent privatizations, licensing tenders and strategic partnerships. The sector has been remarkably active recently and offers major opportunities to investors. Energy consumption in Turkey is low when compared with Western European countries. However, the large, young and increasingly urban population together with expected industrial development potential in Turkey represents a significant growth potential. Currently, Turkey is a major energy importer, as the increase in its energy consumption has outpaced domestic production. Substantial investment in the energy sector will be required in near future in order to meet the increasing demand in Turkey. The energy consumption in Turkey has reached a level of 102 million tons of oil equivalent, or 1,420 kg of oil equivalent per head in 2008 (which is still below the level of developed countries) with an increasing trend between 2004 and 2008. Given the slowdown in the economy since mid-2008, the increase in energy consumption slowed from 5.3 percent y-o-y in 2007 to 1.4 percent in 2008. The decline continued in 2009 with a fall of 5.3 percent due to 1 the global recession; however an increase of 2.5 percent annually is expected between 2010 and 2013 . The Turkish electricity market is one of the fastest growing in the world. Installed capacity has continued to rise regularly between 1998 and 2009 from 23,354 MW to 44,766 MW respectively with a CAGR of 6.1 2 percent . In line with the increase in the number of natural gas fired power plants and hydro electric plants, both constitute the highest share in energy resources with 34 percent each, followed by hard coal and lignite 3 forming 24 percent together. Turkey’s domestic oil and gas production meets less than 3 percent of its energy requirements, making the country a major importer of oil and gas. 90 percent of Turkey’s crude oil is imported, mainly from Saudi Arabia, Iran, Iraq and Russia. 70 percent of domestically produced oil is provided by the state-run Turkish Petroleum Corporation (TPAO), with the remainder produced mainly by Royal Dutch/Shell. As regards natural gas, Turkey is dependent on imports from Russia which corresponded to 63 percent of the total in 4 2007. Other suppliers include Iran, which accounted for 17 percent and Azerbaijan for 4 percent of the total. The natural gas market in Turkey is shaped by the Natural Gas Market Law which was enacted in 2001. Accordingly, a gas release program was initiated and the transfer of the rights under 4.75 bcm (billion cubic meters) of BOTAS’s contracts (14 percent of actual gas imports) was completed. These rights were acquired by four private sector companies, which won the public tender and have now started gas imports. The state-owned pipeline operator and gas supplier BOTAS previously handled all oil and gas imports and owns the distribution infrastructure, though its dominant share of the market is planned to be further reduced in the coming years in line with Natural Gas Market Law....