Insights into Turkish Domestic and International Politics during December 2011

Key Points:

• The TSK mistakenly bombs unarmed Kurdish smugglers near the Iraqi border, adding yet another incident that sets back Turkish-Kurdish relations and possibly fueling further violence.
• Military, economic and political ties are severed between France and NATO ally Turkey following the National Assembly’s vote to move an Armenian genocide bill forward.
• Turkey’s Central Bank sells off over $1 billion in dollars to combat rising inflation, though by month’s end the rate had surpassed 10%.
• Azerbaijan and Turkey agree to a new gas transport and supply deal for the Shah Deniz field, upsetting some in Brussels who feel the new pipeline could undermine the time consuming progress for NABUCCO. READ MORE

• EGF Editorial  |  Date: 21.01.2012  |  Published on EGF: 21.01.2012  |  External Relations
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Issue 10: November-December 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom hasn’t given up on its attempts to break into South-East Asian gas markets. Its proposal for a potential trans-Korean pipeline has found support in both North and South Korea. However, North Korea’s change in leadership casts a shadow of doubt over the situation
• Gazprom’s purchase of the remaining 50 percent share in Beltransgaz brought a sigh of relief to European consumers, with transit disputes and Belarusian debts for Russian gas seemingly laid to rest. The purchase is one of several measures designed to bring Russia and Belarus closer together, and demonstrate to Ukraine the potential benefits of selling its gas transportation system to Gazprom
• Nord Stream was launched with great fanfare. The launch has a substantial impact on the current transit situation, with Ukraine looking like the loser of the piece as its transit volumes are increasingly likely to fall
• Gazprom intensified negotiations with Kiev over the possible sale of Ukraine’s gas transit system. Given the sale of Beltransgaz to Gazprom and the announcement that South Stream will go ahead as planned, there is a fair chance that Kiev will give up shares in its gas transport system
• The Turkish national gas pipelines operator, Botaş has refused to renew its 26-year contract to purchase 6 billion cubic metres (bcm) of Russian gas annually, which expired on the 31st of December 2011. Gazprom’s subsequent attempts to circumvent the national supplier have failed: The Turkish Ministry of Energy has refused applications by 26 companies for licences to import Russian gas
• PGNiG has filed an arbitration case against Gazprom for lower gas prices and greater spot-price element in contracts. Even if the Polish company ultimately succeeds in its aim, the process could drag on for months
• Gazprom plans to pay record dividends, estimated to be 200bn Roubles. However, shareholders should not expect such generosity from Gazprom next year: The size of Gazprom’s declared investment programme precludes similar profits next year.

• EGF Editorial  |  Date: 19.01.2012  |  Published on EGF: 19.01.2012  |  Energy
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Following the earthquake on October 23, 2011, a second powerful tremor struck eastern Turkey on November 9, killing 40 people including a Japanese rescue worker and two Turkish journalists who were covering the aftermath of the October quake.
The strong quake came on top of a severe cold snap that left much of the province of Van covered in snow, as refugees in the stricken city of Ecris continued to live out of tents. READ MORE

• EGF Editorial  |  Date: 02.01.2012  |  Published on EGF: 30.12.2011  |  External Relations
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Issue 9: October 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• In a somewhat surprising development for Gazprom, Turkish state-owned gas pipeline operator, Botaş, has declined to extend its contract for 6 billion cubic metres (bcm) of gas per year. The move is seen by some as an attempt by Ankara to obtain gas price discounts.
• The Polish state-owned energy company, PGNiG, has joined its European counterparts in pressing for lower gas prices from Gazprom. Warsaw wants to change the gas price formula and tie it to spot gas market prices.
• Another recent, unpleasant surprise for Gazprom was the launch of an investigation into its European partners carried out by the European Commission (EC). Officially, the EC investigation concerns the potential violation of antimonopoly legislation, although some commentators see the investigation as an attempt to strengthen the position of European consumers in their negotiations with the Russian gas giant.
• Belarus has agreed terms with Gazprom for the sale of the remaining 50 percent stake in Beltransgaz. In return, Belarus President, Alexander Lukashenko, is demanding guarantees of transit through the Belarusian pipeline network and a reduction in gas import prices to the level of internal Russian prices.
• Ukraine President, Viktor Yanukovich’s attempt to destroy his political rival, Yulia Timoshenko, is playing into Gazprom’s hands. As Brussels toughens its stance towards Kiev, Ukraine is forced to be more amenable in its negotiations with Russia, especially those over the future of Ukraine’s Gas Transit System (GTS)
• Prime Minister Vladimir Putin’s visit to China failed to produce a breakthrough in negotiations over the Altai gas pipeline and potential Russian gas deliveries to China. The price of gas exports via the Altai pipeline remains the main stumbling block, as Gazprom is currently seeking other ways of exporting gas to China, namely via the Sakhalin-Khabarovsk-Vladivostok pipeline.

• EGF Editorial  |  Date: 13.11.2011  |  Published on EGF: 13.11.2011  |  Energy
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Insights into Turkish Domestic and International Politics during October 2011
Key Points:

• Turkey’s economy continues to flourish in comparison with other developed economies on its European periphery. The country gained over a million jobs and clocked an 11 percent growth rate in the first quarter of 2011 while its GDP grew by 8.8 percent.
• Germany’s Foreign Minister, Guido Westerwelle, leant his support to the Turkish accession bid to the EU, saying that the EU should be “fair to Turkey in the negotiation process.”
• Ankara continues its condemnation of Syrian violence against opposition and activist members, and according to a number of reports, is now hosting a group of former Syrian soldiers called the Free Syrian Army.
• A large earthquake in the Van province has exacerbated Kurdish-Turkish relations with claims of bias being leveled at the government for the manner of its response to the disaster in the mainly Kurdish region.
• Turkish Security Forces (TSK) continue their assault on PKK strongholds in Iraq after a devastating attack in mid-October that left 24 TSK soldiers dead. On October 28, police arrested a number of pro-Kurdish BDP Party members in and around Istanbul, including member of the intra-party constitutional commission, Buşra Ersanli.
• Azerbaijan and Turkey finally conclude a natural gas supply agreement following two years of negotiations, while BOTAS informs Gazprom that it will not renew a key existing gas supply contract with Russia.

• EGF Editorial  |  Date: 13.11.2011  |  Published on EGF: 13.11.2011  |  Energy
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Insights into Turkish Domestic and International Politics during September 2011
Key developments:

• Turkish Prime Minister Erdogan’s September is filled with tumultuous foreign policy issues, coalescing disputes with Israel, Cyprus and the world’s stance towards Somalia in his statement to the UN General Assembly.
• The prime minister visited Libya, Egypt and Tunisia in a quick tour of countries touched by the Arab Spring while continuing his condemnation of Syrian repression of civilians and rebuffing Iranian and Russian anger at Ankara’s participation in NATO’s missile shield.
• Kurdish-related violence seizes the country through terrorist attacks and military operations between PKK fighters and the Turkish military. BDP Kurdish Peace and Democracy Party parliamentary deputies end their boycott of the parliament in order to end the hostilities.
• The European Commission instigates raids on Gazprom subsidiaries on suspected competition violations, with many calling it a political move to garner support for Nabucco and undermine South Stream and Nord Stream.
• Energy major BP announces a planned pipeline from the Shah Deniz II field in Azerbaijan traversing Turkey, Romania, Bulgaria and Hungary.

• EGF Editorial  |  Date: 12.10.2011  |  Published on EGF: 12.10.2011  |  Energy
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Issue 8: August-September 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom partners raided by European Commission Anti-trust Inspectors
• The dispute between Moscow and Kiev continues. Ukraine knows that it has a weak bargaining position and is in no hurry to make concessions to Russia
• Prime Minister Vladimir Putin launched the first string of Nord Stream, meaning Ukraine is now in danger of losing its status as the main transit country for Russia’s European gas exports
• Gazprom has signed roadmap with South Korea's Kogas for the construction of a pipeline from Vladivostok to South Korea
• Gazprom may suspend its project in Nigeria because of the lack of a law governing the oil and gas industry, although experts say Gazprom may have lost interest in this project because of potential difficulties in selling Nigerian gas
• Gazprom is looking to acquire two state-owned oil and gas companies in Kyrgyzstan
• The Gazprom affiliate Vemex has acquired a 51% stake in RSP Energy, marking the first time a Gazprom Group company will sell gas and electricity to Czech households
• Gazprom has signed a legally-binding agreement with its European partners on the implementation of the South Stream project, but has attracted criticism from the EU. According to Russian sources, EU Energy Commissioner, Guenther Oettinger, views South Stream as an attempt by Moscow to derail the ‘Southern Corridor’ gas supply diversification concept
• In line with new oil production projects in the region, Gazprom Neft is considering the construction of a new oil refinery near Murmansk
• Gazprom expects a doubling of the Mineral Extraction Tax by 2013.

• EGF Editorial  |  Date: 12.10.2011  |  Published on EGF: 12.10.2011  |  Energy
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by Mehmet Ogutcu,
Expert in global energy security matters

The Turkish leadership has committed itself to a tough position on Israel, Cyprus and Syria, and any backtracking or sign of weakness will seriously affect its credibility at home, with regional partners, the “Arab Street” and other major global powers, as well as high stakes involved in the Eastern Mediterranean. This represents a policy of principle, consistent with the values and goals the government pursues, but is also a risky one, which if not well managed may lead to some undesirable hot confrontation. The power comes with responsibility if it will be effectively harnessed.

• EGF Editorial  |  Date: 06.10.2011  |  Published on EGF: 05.10.2011  |  Security
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Insights into Turkish Domestic and International Politics during July 2011
Key developments:

• Turkey is shaken by the abrupt early retirement of the four highest-ranking military officials in the country just prior to the August meeting of the Supreme Military Council. The generals’ resignations, requesting retirement, are in protest at the continued detention of military officers as part of the “Sledgehammer” coup plot investigation.
  
• The domestic political scene calms as the Republican People’s Party (CHP) ends its parliamentary boycott, although the “independent” Peace and Democratic Party (BDP) delegates continue to refuse to be sworn in.
  
• Despite the fact that over 10,000 Syrians have crossed the border and sought refuge in Turkey, in July Ankara maintained a muted stance towards the Syrian crackdown as no viable alternative to the Assad regime has emerged.
  
• Iran, Syria and Iraq announce the Islamic Gas Pipeline project that will compete with Nabucco, while Turkey and Azerbaijan continue to argue over energy issues that could threaten the progress of the Nabucco gas pipeline
  

• EGF Editorial  |  Date: 12.08.2011  |  Published on EGF: 12.08.2011  |  External Relations
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There is a certain understanding amongst Middle East politics experts that a game breaking event of cataclysmic proportions hits the region once every ten years or so. September of this year will mark the 10th anniversary of the unimaginable acts of terrorism which were perpetrated in New York in September 2001 by Arab suicide bombers.

• Dr. Marat Terterov  |  Date: 18.07.2011  |  Published on EGF: 18.07.2011  |  External Relations
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