The general view among the business community is that the July 15 2016 failed coup attempt will not affect Turkey's important role in the energy sector. Turkey and the European Union hope to reduce their dependency on imported Russian gas through the diversification of sources via the Trans-Anatolian Pipeline (TANAP) – part of the Southern Gas Corridor initiative – which is expected to become operational by 2018 (for further information please see "TANAP: overview of long-awaited gas pipeline project").
Turkey also aims to repair and improve its diplomatic ties with Russia and cooperate on several energy initiatives. The statements that Presidents Erdogan and Putin made during their August 9 2016 summit aimed to bring closure to a period of diplomatic tension and trade sanctions following the November 2015 jet crisis, in which Turkey downed a Russian jet.
Repairing the relationship between Turkey and Russia would be a major boost for the Turkish energy sector. Work on the suspended Turkish Stream pipeline – which will stretch from Russia to Turkey – should be resumed once Russia and Turkey re-establish diplomatic ties. The pipeline would enable Russia to transport gas to Europe via an alternative route. It appears that the project's details will be clarified further when the parties renew close diplomatic ties.
The lifting of sanctions on Iran is another recent development that could directly affect the Turkish energy market. As a newly opened energy market, Iran is attracting attention from Turkish, European, Chinese and US corporations. With the world's second largest natural gas reserve and fourth largest oil reserve, Iran saw a substantial reduction in its oil exports due to international trade embargoes. The removal of sanctions will inevitably impact the Turkish energy market, as well as international energy strategies and trade. Turkish and Iranian companies, together with US and Europe-based players, can potentially cooperate in downstream oil and gas operations and renewable investments in this profitable and newly opened energy market.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
For further information on this topic please contact Ömer Kesikli at Kesikli Law Firm by telephone (+90 216 348 29 24) or email ([email protected]). The Kesikli Law Firm website can be accessed at www.kesikli.com.
