Turkey - Salih Pasaoglu.

The CEO Botas Int'l Ltd (BIL), Pasaoglu's firm runs the Turkish sections of both the BTC crude oil pipeline and the Southern Caucasus Gas Pipeline (SCGP) which pumps Shah Denis gas to Turkey. Pasaoglu gave MEED a lengthy interview published on Sept. 30, 2005, in which he said high oil prices had a "negative effect on the Turkish economy and on Botas' budget". He added: "Turkey is seeking to introduce a cap on the high [gas] prices so that we can remove the volatility. The discussions [with Gazprom in Moscow] are continuing. The supply of gas from the Caspian [from late 2006] and Egypt [from 2009] will help to regulate the price. We have not yet talked about the price of Egyptian gas, but we are hoping that, like the Caspian gas, it will be cheaper than [gas from] Russia. This will reduce the average price of gas imports".

On the reforms and opportunities for private investors in the gas sector, Pasaoglu told MEED: "Botas is...to transfer its gas import contracts to the private sector. As well as this, the Turkish regulatory authority allows private companies to develop new gas import contracts to supply companies" (see down20TurkWhoMay15-06).

Botas has had its status changed in 1995 from being a TPAO subsidiary. Now it is under the energy ministry (see omt20TurkWho'sMay12-08). Until it is privatised and broken into several entities, it has the following assets and responsibilities: ownership and the running of the oil and gas pipelines and their terminals in Turkey, ownership and operations of the Turkish portions of the Iraq-Ceyhan crude oil pipeline, the pipeline which brings gas from Russia through Bulgaria, the Turkish section of the Blue Stream pipeline that pumps Russian gas through the Black Sea, the pipeline from the Turkish-Iranian borders which brings Iranian gas, the oil and gas pipelines from Azerbaijan, the Marmara-Ereglisi LNG receiving/regasification terminal for liquefied gas arriving from Algeria and Nigeria, and an underground gas storage facility at Salt Lake on which work began in early 2006. There will be several underground facilities in the future.

In 1996, Botas got the state to authorise it to set up a unit in Jersey to operate in areas which would overlap with TPAO's activities. This unit was authorised to explore for, produce, refine, store and market crude oil, natural gas, LNG and their derivatives. Its capital was set at $500,000 and Botas was to transfer up to $10m from Turkey to the Jersey company.

The IMF in 2002 proposed that, in return for its help in bailing Turkey's economy out of its worst crisis since 1945, the government scrap Botas' monopoly on gas imports and domestic distribution. It said: "The initial step should be to allow parties other than Botas to import gas and supply particular industries or regions using Botas' transmission pipelines if necessary with regulated transmission tariffs".

This view is supported by lenders and other international agencies like the World Bank, as well as Turkey's business community. But Russia and Iran has turned down Botas requests to change existing SPAs in favour of contracts with private Turkish companies for smaller amounts of gas.

Iran's NIGEC has refused to approve Botas' transfer of import right to private groups. The main reason was that the Botas' ToP commitments under the existing SPA are guaranteed by the Turkish state through its Central Bank. No such sovereign guarantees can be given to private companies in Turkey.

But Gazprom has signed a gas SPA with Shell for distribution in Turkey.