Asian bids 'closer' to winning Turkey's 2nd nuclear plant project

Project image from Akkuyu Nuclear Power Plant of Turkey

Hurriyet Daily News

Asian countries are closer to winning a bid to build Turkey's second nuclear power plant near the Black Sea city of Sinop, the Turkish energy minister said on Tuesday, in a signal that Canada was no longer in the running.

"Even though we have not reached a final agreement right now, I can say that Far Eastern countries are closer" to winning the tender on the building of a second reactor, Taner Yildiz was quoted as saying by the Anatolia news agency. Ankara is officially in negotiations with China, Japan, South Korea and Canada to build the second nuclear reactor. The government plans to build three nuclear power plants within five years in hopes of preventing a possible energy shortage and reducing dependence on foreign energy supplies.

Turkey struck a deal with Russia in 2010 to build the country's first power plant at Akkuyu in the southern Mersin province.

Yildiz said Tuesday that there was no agreement yet on the location of a third reactor but added that the town of Igneada in the Black Sea region near the Bulgarian border was one of the options.

Source: http://www.hurriyetdailynews.com/asian-bids-closer-to-winning-turkey-nuclear-plant-project.aspx?pageID=238&nID=37612&NewsCatID=348

The New Mediterranean Oil and Gas Bonanza Part II: Rising energy tensions in the Aegean—Greece, Turkey, Cyprus, Syria

F. William Engdahl      Global Research

The discovery in late 2010 of the huge natural gas bonanza off Israel’s Mediterranean shores triggered other neighboring countries to look more closely at their own waters. The results revealed that the entire eastern Mediterranean is swimming in huge untapped oil and gas reserves. That discovery is having enormous political, geopolitical as well as economic consequences. It well may have potential military consequences too.

Preliminary exploration has confirmed similarly impressive reserves of gas and oil in the waters off Greece, Turkey, Cyprus and potentially, Syria.

Greek ‘energy Sirtaki’ 

Not surprisingly, amid its disastrous financial crisis the Greek government began serious exploration for oil and gas. Since then the country has been in a curious kind of a dance with the IMF and EU governments, a kind of “energy Sirtaki” over who will control and ultimately benefit from the huge resource discoveries there. 

In December 2010, as it seemed the Greek crisis might still be resolved without the by-now huge bailouts or privatizations, Greece’s Energy Ministry formed a special group of experts to research the prospects for oil and gas in Greek waters. Greece’s Energean Oil & Gas began increased investment into drilling in the offshore waters after a successful smaller oil discovery in 2009. Major geological surveys were made. Preliminary estimates now are that total offshore oil in Greek waters exceeds 22 billion barrels in the Ionian Sea off western Greece and some 4 billion barrels in the northern Aegean Sea. [1] 

Iraq, Kurds, Turks and oil: A tortuous triangle

The Economist

The governments of Turkey, Iraq and Iraqi Kurdistan play a dangerous game

SNAKING their way from Kirkuk, a city 240 kilometres (150 miles) north of Baghdad, through Kurdistan and across Turkey’s eastern region of Anatolia to the Mediterranean are pipes that once carried 1.6m barrels a day (b/d) of Iraqi oil to the global market and yielded fat transit fees to Turkey along the way. The infrastructure underpinned the two countries’ mutual dependence. But nowadays the balance of power has shifted. A third party, the Iraqi Kurds, has changed it. It is unclear who will emerge on top. But Iraq’s central government in Baghdad is on the defensive.

Wars, saboteurs and, since the 1990s, economic sanctions have left the Iraqi sections of the pipeline system in a mess. Barely a fraction of its capacity is used. One of the two parallel lines stands empty and the source that once fed them, the giant Kirkuk oilfield, is dilapidated. The oil ministry in Baghdad has vague ideas about revamping the pipeline, perhaps to carry crude extracted near Basra, in the far south, though this would need an expensive new pipeline to link both ends of the country.

But Turkey is hatching a different plan for its section of the Kirkuk-to-Ceyhan pipeline. Its souring relations with the government in Baghdad have spurred it to cultivate new ties with the Iraqi Kurds’ regional government in Erbil, which oversees the oil and gas that Turkey’s growing economy craves. A wide-ranging energy deal is in the works that will see state-backed Turkish firms and Western oil majors plough money into Kurdish infrastructure and oilfields, connecting them to Turkey and the world beyond. The deal could eventually allow for up to 2m b/d of Kurdish oil exports to go through Turkey.

Last year, trade between Turkey and Iraqi Kurdistan amounted to $8 billion. Turkish money has paid for pristine airports in Erbil and Dohuk, an Iraqi Kurdish city further north, and for other large projects. Not long ago, Turkish politicians, wary of their own large and restless Kurdish minority still fighting for autonomy (or more) in eastern Turkey, barely acknowledged Iraq’s autonomous Kurdish region.

Turkey’s tech businesses: Boom on the Bosporus

The Economist

Lots of young people, eager to shop and play online: no wonder Turkey’s internet industry is crowded

MUSLIM farmers do not keep pigs. This is as true of those who play at virtual agriculture as of those who fill physical food-troughs. So there are no pigs in the Arabic version of “Happy Farm”, published by Peak Games, a young firm based in Istanbul. For the same reason “Happy Farm” has no vineyards, and female farmhands wear the hijab. Local tastes matter.

Peak Games has found rich soil. It already employs 200 people and has developers in Jordan and Saudi Arabia as well as Istanbul and Ankara. More than 35m people play its games at least once a month, many of them on Facebook. Half of the players are in Turkey; the rest are in the Middle East and north Africa. Rina Onur, one of its founders, says that she and her colleagues saw a gap in the online-games market that companies catering to Western tastes could not fill. So Peak Games offers people in Turkey and nearby countries games with a regional twist, like “Happy Farm”, as well as online versions of traditional amusements. Okey, a Turkish game played with tiles, is most popular.

Turkey is bursting with internet companies, many of them selling things to the young. It is not hard to see why. The country is big, youthful and embracing the internet eagerly. Half of its 75m people are under 30. Around 44% of Turks use the internet, up from just 14% in 2006 and 3% in 2000. They comprise Facebook’s seventh-largest national audience. Turks are also happy to use credit cards, which are handy for buying things online: the country has three of them for every five people, says GP Bullhound, an investment bank, more than the European average. And the market still has a lot of room to grow. Penetration rates are well below those in western Europe (see chart).

Turkey weighs pivotal oil deal with Iraqi Kurdistan

Ben Ven Heuvelen     The Washington Post

ANKARA, Turkey — American diplomats are struggling to prevent a seismic shift in Turkey’s policy toward Iraq, a change that U.S. officials fear could split the foundations of that fractious state.

The most volatile fault line in Iraq divides the semiautonomous Kurdistan region in the north from the Arab-majority central government in Baghdad. As the two sides fight for power over territory and oil rights, Turkey is increasingly siding with the Kurds.

Kurdish and Turkish leaders have had a budding courtship for five years. But now Turkey is negotiating a massive deal in which a new Turkish company, backed by the government, is proposing to drill for oil and gas in Iraq’s Kurdish region and build pipelines to transport those resources to international markets. The negotiations were confirmed by four senior Turkish officials, who spoke on the condition of anonymity because of political sensitivities.

“Turkey hasn’t needed to ask what we think of this, because we tell them at every turn,” said a senior U.S. official involved in Middle East policymaking, speaking on the condition of anonymity because he was not authorized to talk with the media. The official said that any bilateral energy deals with the Kurdistan region would “threaten the unity of Iraq and push [Prime Minister Nouri] al-Maliki closer to Iran.”

Greece Is Not Poor - It Actually Has Massive Uptapped Reserves Of Gold, Oil And Natural Gas

By Michael

It turns out that the poster child for the European debt crisis is not actually poor at all.  In fact, the truth is that the nation of Greece is sitting on absolutely massive untapped reserves of gold, oil and natural gas.  If the Greeks were to fully exploit the natural resources that are literally right under their feet, they would no longer have any debt problems.  Fortunately, this recent economic crisis has spurred them to action and it is now being projected that Greece will be the number one gold producer in Europe by 2016. 

In addition, Greece is now opening up exploration of their massive oil and natural gas deposits.  Reportedly, Greece is sitting on hundreds of millions of barrels of oil and gigantic natural gas deposits that are worth trillions of dollars.  It is truly sad that Greece should be one of the wealthiest nations in all of Europe but instead the country is going through the worst economic depression that it has experienced in modern history.  It is kind of like a homeless man that sleeps on the streets every night without realizing that a relative has left him an inheritance worth millions of dollars.  Greece is not poor at all, and hopefully the people of Greece can learn the truth about all of this wealth and chart a course out of this current mess.

I have written extensively about the nightmarish economic conditions that Greece is experiencing right now.  Just check out this article, this article and this article.  Since the depression began in Greece, the Greek economy has contracted by more than 20 percent.  In April 2010, the unemployment rate in Greece was only 11.8 percent.  Since then it has skyrocketed to 25.1 percent.

China ‘has advantage’ in bid for Turkey's 2nd nuclear plant

 

 Hurriyet Daily News

A withdraw from Treasury guarantee demand and self-financing option makes China advantageous in its race with Japan, South Korea and Canada for Turkey’s second planned nuclear facility, Turkish Energy Minister Yıldız says. The winner is expected to be announced before the end of the year

As the Turkish government nears the deadline it set for itself to announce the winning company of a bid for a second nuclear plant in the Black Sea region, Energy Minister Taner Yıldız has said China possesses an advantage.

China brings it own financing to the project and does not demand a Treasury guarantee, which are important advantages, Yıldız said at the Caspian Forum 2012 in Istanbul  Reuters reported.

However, China is also demanding a share in the discussed facility, Yıldız said.

Canada, South Korea and Japan are also bidding for the Sinop nuclear facility plans and the ministry had earlier announced the winner would be made public by the end of this year.

Why The Middle East Has A Big Oil Problem: 'Squaring Obama's Xi Circle'

Matthew Hulbert     Forbes

‘Stick or twist’ sums up the changes of political power in America and China in November 2012. President Obama won another four year term in Washington, whileXi Jinping assumed stewardship of China. This intricate ‘Chimerican’ relationship is fundamental to the global outlook anywhere you care to look, and nowhere more so than the Middle East. External security provision is still provided by the West, while economic pull has shifted to the East. Sounds a simple division of labour, but the ‘roles’ actually become very mixed up once you take a closer look. Squaring this awkward ‘Chimerican’ circle is going to be a tough ask for Gulf States to get right, but it’s absolutely critical to their geo-economic and geopolitical future to do so over the next four years.

Team America

From the U.S. perspective, the old mantra has always been that a threat to Middle East oil supplies correlated to a direct threat to American national security. This was explicitly spelt out in the 1980 Carter Doctrine that’s been the cornerstone of Washington’s role in the Gulf ever since. But times are now rapidly changing, and doing so, precisely because the U.S. has seen enormous hydrocarbon production growth on home soil. The initial energy ‘revolution’ was in natural gas, making America the world’s largest single (651bcm) producer, and’s now shifting towards liquids. U.S. oil production growth has been 500,000b/d over the past four years, with total liquids output expected to hit 11.4mb/d next year and onto 13-15mb/d towards 2020. That will make America the largest single liquids player in the world, surpassing even Saudi production numbers, with the obvious upshot that Washington no longer sees MENA oil as the valued prize it once was. Whether you’re like the International Energy Agency and fully signed up to the ‘U.S. energy independence’ narrative or not doesn’t really matter: The Obama Administration believes it has sufficient ‘hydrocarbon’ space to pick and choose what it does or doesn’t decide to do to underwrite global energy supplies in future. That’s exactly what it’s going to do over the next four years.

Is the new Cyprus-Greece-Israel energy triangle casting a net for Turkey?

George STAVRIS       Hürriyet Daily News

Long-running speculation over massive natural gas reserves in the tumultuous Southeastern Mediterranean and Cyprus’ Exclusive Economic Zone (EEZ) became a reality in December 2011 when official research and scope reports were released.

Today, the Republic of Cyprus finds itself grappling with this mixed blessing. These rich findings can provide long-term benefits for the country but Cyprus is more like a novice treading a very slippery floor in the major leagues of global diplomacy.

A new but familiar player, the state of Israel, has made a thunderous entry into the traditionally loud trio of Greece, Cyprus and Turkey, causing significant ruptures to the balance of the neighborhood. The event that sparked Israel’s newfound interest in Cyprus was the definitive signs of massive natural gas reserves in Cyprus’ Plot No. 12 (fittingly codenamed “Aphrodite”), right next to Israel’s own EEZ and massive reserves in its “Leviathan” plot.

It became apparent right from the start that Israel naturally considered every issue as highly imbued with its own national interest. Thus the decision to collaborate in treating the extracted natural gas and then transporting it to Europe (from both countries’ plots) came as a complete formula: pipelines would be part of a joint network, a vast specialized storage terminal, valued at 10 billion euros and funded almost completely by Israel. They would be built at the Vassilikos port near Limassol and the majority of the approximately 10,000 highly skilled personnel needed would be Israelis. Naturally, additional issues have come up in the logical process of things. The project will take about six or seven years to complete and inevitably the thousands of Israeli personnel engaged in it will need to have their families near them, so the total number of Israelis in Cyprus would become even greater, at least 15,000. These Israeli citizens will need to be housed in safe and secure conditions near the working site. Any analyst can easily run the math on the size and nature of this security force.

Russia-Iraq arms deal $4.2 billion, incl anti-aircraft missiles & radar for Kurdistan to address Turkish air ops targeting PKK

Nidal al-Laythi  Al Monitor

Russia’s Council of Ministers issued a press release on the meeting held by Russian Prime Minister Dmitri Medvedev and Iraqi Prime Minister Nouri al-Maliki, who is currently on a visit to Russia.

The press release said that Iraq has signed arms deals worth over $4.2 billion with Russia during the second half of 2012. The deal was described by observers as the biggest move to help the Russian arms industry avoid recession after it lost its markets in Libya and Syria.

It marks the biggest single weapons transaction Moscow has conducted for 30 years, except for deals with Algeria and Venezuela.

MP Hakim al-Zamili, a member of the security and defense committee in the Iraqi parliament, told Azzaman that the Russian arms deal, signed by the Iraqi prime minister during his visit to Moscow, includes the purchase of anti-aircraft missiles and radar systems that will be installed in the Kurdistan region to address violations by Turkish aircraft of Iraqi airspace as part of their operations against the Kurdistan Workers' Party (PKK), which is carrying out military operations against the Turkish army from and through Iraqi territory.

UAE may Join Turkey Nuclear Power Plant Project

AFP

The United Arab Emirates could join a project to build Turkey's second nuclear power plant if South Korea is involved, Turkish energy minister said today.

"Officials from the United Arab Emirates said they could be a partner in the project if South Korea undertakes the building of the nuclear power plant plant," in northern Turkey, Taner Yıldız was quoted as saying by Anatolia news agency.

The government plans to build three nuclear power plants within five years in hopes of preventing a possible energy shortage and reducing dependence on foreign energy supplies.

Turkey struck a deal with Russia in 2010 to build the country's first power plant at Akkuyu in the southern Mersin province.

The government plans to build a second reactor in northern Turkey, near the Black Sea city of Sinop. But it has not yet announced a location for a third reactor.

Ankara is negotiating with a number of countries including South Korea, China and Japan for the second power plant

Israel's Natural Gas Challenges

Simon HENDERSON*        The Washington Institute    PolicyWatch 1978

A top-level Israeli government committee has produced a blueprint for exploitation of substantial natural gas reserves, but solutions must still be devised for a range of technical, commercial, and political problems.

In October 2011, following the discovery of large quantities of natural gas off Israel's Mediterranean coast, Prime Minister Binyamin Netanyahu appointed an interministerial committee to formulate policies for development of the new resources. Last week, the so-called Zemach Committee -- after chair Shaul Zemach, director-general of the Ministry of Energy and Water -- offered its recommendations. The panel's mandate was to offer suggestions on ensuring Israel's energy security, facilitating competition in its emerging domestic natural gas market, leveraging the environmental benefits of natural gas compared with other fuels, and maximizing the economic and political benefits.

BACKGROUND

Natural gas was first found in Israel's waters in 1999, when the Noa field was discovered off the coast of Ashdod. It was judged too small for commercial development, but in 2000, the Mari-B field was found nearby and has been supplying gas to Israeli power plants since 2004. In addition, Egypt began exporting gas to Israel in 2008, though it canceled that contract earlier this year after the pipeline was repeatedly sabotaged in Sinai. In January 2009, the Tamar field was discovered eighty miles off Haifa, with enough gas to supply Israel's domestic needs for fifteen years. And in December 2010, an even larger discovery was made in the Leviathan field west of Tamar. Although its full size has yet to be confirmed by further exploratory drilling, the finding led Israel to begin seeing itself as a significant gas exporter. Further small gas fields have since been discovered.

Kurdish oil trade with Turkey rising, more to come

REUTERS - Iraq    by Pec Mackey


Kurdistan is taking its first steps towards gaining independence from Baghdad in the sale of its oil and gas with a convoy of trucks taking the condensate liquid fuel bi-products of a remote gas field directly into Turkey.

At least 15 trucks a day are loading up with high quality condensate at Khor Mor's gas plant and then trundling down a bumpy road to start the two-day journey to Mersin on the Turkish Mediterranean.
In return, Turkey is trucking back small quantities of diesel fuel and kerosene to use in the autonomous region's power plants.

"It's a very simple but symbolic start to direct oil trade between the Kurdistan Regional Government (KRG) and Turkey - and there will be more to come," said an official familiar with the barter-type operation between private companies.

"Neither side is thinking about stopping."

But Baghdad wants them to. It believes Iraq's central government has the sole right to export oil and gas produced throughout Iraq and says deliveries by truck from Kurdistan across the border into Turkey are illegal.

Ankara is meanwhile encouraging the swap, which kicked off with five tankers in July. And Turkish Energy Minister Taner Yildiz says the volume could gradually build up to 200 trucks a day - roughly 40,000 barrels per day (bpd).

Turkey’s energy dance

 
J. Berkshire Miller*    CNN

Surrounded by a sea of uncertainty, Turkey continues a sustained effort to bolster its ties with East Asia. Ankara has long established relations with the region’s key players, including China, Japan and South Korea. A historical lack of management of these key relationships, though, has led to Turkey underperforming in its attempts to brand itself in the region. At the same time, though, Turkey is facing considerable challenges and opportunities in its own geopolitical neighborhood.

The strategic topography of the Middle East remains dynamic and unpredictable, and the sovereign debt crisis in Europe risks jeopardizing Ankara’s significant interests in exporting and serving as a transit country to the continent. This region will always be Turkey’s backyard and the legacy of the Ottoman Empire allows a certain amount of exceptionalism – and sometimes isolation – when dealing with neighbors.

One area where Ankara is hoping to secure an agreement with Asia is through the development of its civil nuclear program. As Turkey’s economy and population have continued to grow, the government has remained committed to finding new energy sources to meet increased demand.

But complicating matters have been strained relations with Syria, Iran and the Kurdish region of Iraq. Nearly half of Turkey’s energy imports come in the form of gas, mainly from Russia and Iran. Gas from Iran makes up as much as 20 percent of Turkey’s total energy imports – a number that’s declining rapidly due to American pressure to isolate Tehran over its nuclear program.

Turkey: Is Ankara Going Ballistic?

Ballistic Missiles test fire

Yigal Schleifer    Eurasia.net

Although Turkey late last year indicated its concern about the threat of ballistic missiles by agreeing to host part of NATO's new missile defense shield, Ankara now appears to be moving past this defensive posture towards something more robust.

As Today's Zaman recently reported, officials in Ankara have said that Turkey will soon start developing its own ballistic missiles. From TZ's article:

According to information acquired by Today’s Zaman from sources within the Defense Ministry, Ankara will produce its own ballistic missile system to avert any threat directed against Turkish national security. The decision was taken in a recent meeting of the Defense Industry Executive Committee led by Prime Minister Recep Tayyip Erdoğan on July 17....

....Officials underlined that it is an imperative and necessity for Turkey to produce and develop such missiles to maintain its deterrent capability and to feel safe in an insecure environment. The Scientific and Technological Research Council of Turkey (TÜBİTAK) is now developing a missile called an SOM with a range of 300 kilometers. This will be a first step towards developing a ballistic missile with a range of 2,500 kilometers.

Turkey's New Role for Kurdish Oil Export

An oilfield, 10 kms south of the Iraqi Kurdish city of Arbil, 310 km north of Baghdad.

Nayla Razzouk & Brian Swint    Bloomberg 

Tony Hayward, the former chief executive officer at BP Plc (BP/), is now loading a fleet of as many as 500 trucks a day while he waits for a new pipeline to carry oil from his fields in northern Iraq.

Since joining Genel Energy Plc (GENL) last year, Hayward has pushed the semi-autonomous Kurds to finish building a link to neighboring Turkey so he can find buyers outside the local market. Kurdish contractor Kar Group said it has completed 23 percent of the first 48-mile (77-kilometer) section of the line north to the border, though Turkey hasn’t said publicly it will take the oil. 

Kurdish authorities, feuding with the central government over sharing oil revenue, plan in the next two years to complete the 175-mile export link that will start at a Genel-operated field and move as much as 1 million barrels a day, equal to a third of Iraq’s output now. Following Hayward into the region are Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), bolstering the Kurdish plan to break Baghdad’s control of shipping crude from the landlocked territory that’s ruled itself since the U.S.-led invasion ousted Saddam Hussein in 2003. 

Turkey’s defense purchases to reach $8 billion by 2016

Umit ENGINSOY     Hürriyet Daily News

With large defense projects on the agenda, Turkey will spend $8 billion in defense purchases, the country’s procurement office forecasts. This nearly doubles the current volum.

Turkey will spend up to $8 billion in defense purchases as its exports will reach $2 billion in 2016, four years from now, according to a major estimation by the procurement agency, the Undersecretariat for Defense Industries (SSM).

The present figures are around half of that.

The expectations in the SSM’s updated 2012-2016 strategic program are realistic given the money Turkey would pay for expensive systems – such as the F-35s or the U-214 submarines from Germany – over the next few years, as well as the rapid increase in its exports mainly to Islamic countries, according to one defense analyst.

Turkey is in talks with four key foreign suppliers on a $4 billion Long Range Air and Missile Defense Systems project.

Iranian oil minister to meet with Turkish energy minister to discuss oil and gas trade.

REUTERS

Iran is expected to try to revive demand for its oil in Turkey, its biggest European customer, this week when, according to Turkish energy ministry officials, its oil minister is to meet with Turkish officials in Ankara.

Iranian oil minister Rostam Qasemi is expected to meet Turkish Energy Minister Taner Yildiz on Thursday to discuss supplying oil and gas to one of Europe's fastest growing economies, the officials said.

Tehran has struggled to find new buyers for its barrels after U.S. and European Union sanctions succeeded in halving Iran's global oil exports in the four months from February to June.

Non-EU Turkey, which imported around 200,000 barrels a day of Iranian crude in 2011, also sharply reduced shipments earlier this year to win a waiver from U.S. sanctions that allows it to continue purchasing Iranian crude through the second half of 2012.

Turkey soon to finalise $4 billion air defence procurement

Ümit ENGINSOY      Hürriyet Daily News

Turkey looks to quicken its pace in selecting a $4 billion air defense bid winner after fire from Syrian forces brought down one of its warplanes last week.

Turkey’s highest defense procurement body is expected to select the winner in a $4 billion competition to select the country’s first long-range anti-air and anti-missile defense systems soon, following the downing of a Turkish jet by Syria.

The Defense Industry Executive Committee, whose members include Prime Minister Recep Tayyip Erdoğan, Defense Minister İsmet Yılmaz, Chief of the Turkish General Staff Gen. Necdet Özel and procurement chief Murad Bayar, is set to meet in July. The meeting was expected on July 4, but it was later delayed indefinitely.

Competitors in Turkey’s long-range air-missile systems include U.S. partners Raytheon and Lockheed Martin with their Patriot-based system; Eurosam with its SAMP/T Aster 30; Russia’s Rosoboronexport, marketing the country’s S-300 and S-400 systems; and China’s CPMIEC (China Precision Machinery Import and Export Corporation), offering its HQ-9. Eurosam’s shareholders include MBDA – jointly owned by British BAE Systems, Italian Finmeccanica and pan-European EADS – and France’s Thales. These companies will work with Turkish partners.

The contest comes less than a month after a Turkish RF-4E reconnaissance fighter was shot down by Syria. The Syrian Foreign Ministry said the plane had been hit by a barrage of short-range anti-aircraft machine-gun fire, but Turkish officials said the attack did not bear the traces of anti-aircraft fire. They instead said it had no traces, suggesting that the aircraft might possibly have been hit by a Russian missile defense system. This was not confirmed.

The EU and Turkey: Stronger together By 16 EU Foreign Ministers

BY 16 EU FOREIGN MINISTERS*     euobserver.com


BRUSSELS - At a time when the EU faces economic challenges and continuing instability in the Middle East, our relationship with Turkey matters more than ever.

Last week saw the 50th EU/Turkey Association Council, which demonstrated the need to work together to promote our shared prosperity, security and values.

In these tough economic times, increasing trade with Turkey offers opportunities for EU businesses. With a GDP growth rate of 8.5 percent last year, the second fastest in the G20 after China, Turkey is now the EU’s fifth largest export market.

Turkish entrepreneurs in Europe run businesses worth €40 billion, employing half a million people. In sectors like aviation, automobiles and electronics, our economies are increasingly integrated.

Turkey is well placed to become an energy hub, with both sides benefiting from projects to build the necessary infrastructure, including development of the Southern gas corridor.

The commercial relationship is strong, but could be stronger. While EU-Turkey trade has grown steadily, Turkey's trade with other regions has grown even faster.

This is partly a symptom of the wider shift of economic power to Asia, but also reflects problems with the EU-Turkey customs union and other trade restrictions that prevent our commercial relationship from achieving its full potential.

Removing these restrictions should form an important part of wider efforts to boost economic growth, building on the recent G20 Summit and on the European Council later this week.

We welcome the very recent agreement on a path towards visa liberalisation, linked to broader co-operation on migration. This has the potential to promote trade, combat illegal immigration and support wider people to people contacts.

Here, signature by Turkey of the EU-Turkey readmission agreement would be a crucial step on the way towards fulfilling Turkish citizens' aspirations to travel more freely in Europe.

As the dialogue between the EU and Turkey on mobility and security grows, we hope to see further concrete results. In this framework, we hope Turkey will extend visa free travel to EU member states.

What Russia Gave Syria

David KENNER   FOREIGN POLICY


A guide to Bashar Al-Assad's arsenal


Syrian President Bashar al-Assad has had no better friend than Vladimir Putin's Russia. Just this week, three Russian ships reportedly headed to reinforce the Syrian port of Tartus. Meanwhile, the head of Russia's arms control export company ominously declared that the Syrian regime had been supplied with an advanced-missile defense system -- "whoever is planning an attack should think about this," he said.

Amid these developments, the news that Barack Obama and Putin agreed at the G-20 summit this week to support a political solution to the Syria conflict would seem almost, well, laughable -- if the situation on the ground weren't so dire.

As the death toll rises -- the United Nations says more than 10,000 Syrians have lost their lives -- the United States and Russia remain on opposite sides of the conflict. The Obama administration has declared that Assad must step down, while the Kremlin has staunchly supported the Syrian regime -- vetoing two U.N. Security Council resolutions addressing the conflict andwarning darkly about thousands of "foreign terrorists" fomenting violence in the country.

The New York Times reported on Thursday, June 21, that CIA agents are steering arms to the Syrian opposition, but this covert action pales in comparison to Russia -- which brazenly continues to supply the Syrian regime with advanced weapons that bolster the state and its violent crackdown.

The Syrian-Russian arms trade goes back more than a half-century, to at least the 1950s. At the time, the Soviet Union found a willing Cold War ally in its struggle against the United States and Israel -- when President Hafez al-Assad's regime was threatened by an Islamist-led insurgency in the 1980s, the Kremlin supplied the weaponry and trainers to put down the threat. From 1950 to 1990, the two countries' arms trade totaled at least $34 billion.

China sees role for regional bloc in Afghanistan

Gleb BRYANSKI   REUTERS


BEIJING - (Reuters) - A regional bloc bringing together China, Russia and central Asian states wants to play a bigger role in Afghanistan, Chinese President Hu Jintao said in an interview published on Wednesday, as regional leaders gathered for their annual summit.

The future of neighbor Afghanistan, facing the withdrawal of most foreign combat forces by the end of 2014, is likely to be discussed at the two-day meeting of the Shanghai Cooperation Organisation (SCO), whose member states fear growing instability spilling across the central Asian region as the pullout goes on.

"We will continue to manage regional affairs by ourselves, guarding against shocks from turbulence outside the region, and will play a bigger role in Afghanistan's peaceful reconstruction," Hu was quoted as saying in an interview with China's official People's Daily newspaper about the SCO summit.

"We'll strengthen communication, coordination and cooperation in dealing with major international and regional issues," said Hu.

The SCO, founded in 2001, includes China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Iran, India, Pakistan and others attend the summits, but not as full members.

Turkey's pipeline plans could be transformational for oil explorers in Iraqi Kurdistan

Natasha Barr   PROACTIVEINVESTORS

Iraq is home to some of the world’s largest oil finds. But the exploration companies based in Kurdistan, in northern Iraq, have been unable to capitalise on their position due to the political tension between Erbil and Baghdad.

However, the impasse may be broken after Turkey, Kurdistan’s largest neighbour, revealed last week it had plans to build a pipeline that could transform the fortunes of such companies.

Credit Suisse analyst Thomas Adolff said: “Regarding Iraqi Kurdish exposed oil companies, we would argue that unlike in recent years, we can see the light at the end of the tunnel.”

Iraqi Kurdistan gained autonomy from the federal Iraqi republic in 2005 after the Kurds helped coalition forces fight off Sadam’s Iraqi forces.

However, the validity of oil and gas contracts issued by the Kurdistan Regional Government has long been disputed by Baghdad. And the resolution of this issue has been one of the main uncertainties for investors.

Global Insider: Turkey, Pakistan Stand By Each Other

Global Insider

Turkish Prime Minister Recep Tayyip Erdogan and Pakistani Prime Minister Yousuf Raza Gilani met in Pakistan two weeks ago under the auspices of the bilateral High-Level Cooperation Council. In an email interview, Ishtiaq Ahmad, Quaid-i-Azam Fellow at St. Antony’s College and senior research associate at the Center for International Studies at Oxford University, discussed relations between Turkey and Pakistan.

WPR: How would you characterize modern Turkish-Pakistani relations, and how have they evolved over the past decade?

Ishtiaq Ahmad: The Turkish-Pakistani relationship is rooted in history and defined by the existence of deep ethno-religious affinity between the people of both countries. Despite being geographically separated and ideologically distinct, the two countries have always aspired to expand mutual cooperation in the political, economic, security and cultural spheres.

In the post-Cold War period, Turkish-Pakistani relations have made significant progress toward realizing tangible outcomes in these diversified areas of cooperation, especially in trade and investment. In the 1990s, three Turkish construction companies entered the Pakistani market with pledges of almost $1.5 billion.

The past decade has seen increasing cooperation between the two countries in the security sphere, especially due to the war in Afghanistan, where Turkey is an important member of the International Security Assistance Force. They have also stood by each other in times of natural disaster. 

Turkey takes lead in rebuilding Somalia

Alexander Christie-Miller    The Christian Science Monitor

Turkish workers have flooded Somalia - a country many have long considered too dangerous to work in -  to rebuild it and burnish Ankara's image as a regional player and powerful force in the Islamic world.

When delegates from 57 nations gathered in Istanbul last week to discuss bringing peace and stability to Somalia, one country’s efforts got special attention: Turkey.

Since last year Turkish relief workers and volunteers have poured into the Somali capital of Mogadishu – a city deemed too dangerous to work in by most governments – building hospitals, schools, and public infrastructure.

“Since the coming of Turkey there has been a paradigm shift,” says Somalia’s interim Prime Minister Abdulweli Mohamed Ali, in an interview with the Monitor.

He says Turkey has proven that reconstruction and aid efforts can work even as African Union troops battle to claw back parts of the country from the Al Shabab Islamist group, which is aligned with Al Qaeda.

“You can do it simultaneously,” says Prime Minister Ali. “You can create peace and stability by working on the security side, but also on the development side at the same time. That is what Turkey is successful at.”

Young Turks Return Home: The Brain Gain

Joe PARKINSON   THE WAL STREET JOURNAL

Many well-educated Turks used to look abroad for their career opportunities. But now many think the best opportunities lie at home.

ISTANBUL—Zeynep Dagli never expected to come home so soon.

A graduate of elite universities in the U.K., she worked for four years as a high-flying investment banker in London until 2009, profiting at the height of a boom that made the U.K. capital the center of world finance. Three years later, the 28-year-old Ms. Dagli is making waves back home in Turkey, two years after founding start-up gift-box company Momento, which is forecast to post a turnover of up to 3 million lira ($1.7 million)—a 230% rise—this year.

"In the U.K. or the U.S. I couldn't have had this success and certainly not this quickly. I also couldn't have had this network—it just wouldn't have worked," Ms. Dagli says, explaining the year-and-a-half journey to build the company from scratch after returning from London. "The trend of young Turks returning home to seek opportunities here is going to grow as people now believe that they can make a sustainable fortune here away from the political and financial instability they were used to in the past. If you're a young Turk and you're not going to make it here, where are you going to make it?" she says.

Can Turkey inspire Egypt?

Mustafa ABDELHALIM*   AL ARABIYA

CAIRO - Last week, Egyptians went to the polls to participate in the first presidential election since Mubarak's downfall in February 2011. Going forward, the new president, who will be elected in the second phase of elections in June, should look to examples from other countries that have undergone successful democratic transitions.

When asked what leader outside their own country they most admired, a recent poll from the University of Maryland found that 63 percent of Egyptians answered Turkish Prime Minister Recep Tayyip Erdoğan, indicating that Egyptians may be interested in learning from Turkey. Turkey can serve as a relevant model because it has successfully dealt with three key challenges facing Egypt – the relationship of the army to a civilian government, economic growth and fostering positive international relations.

In terms of the first of these issues, Egypt is currently struggling with what role the Supreme Council of the Armed Forces (SCAF) should play in the new government, and how much power it should hold. While the situations of Egypt and Turkey are different, Turkey provides a useful model when it comes to checking the army’s power through the rule of law, rather than violence.

Turkey rides WEF bandwagon into the Middle East

Roula KHALAF    FINANCIAL TIMES

The World Economic Forum for the Middle East is usually held in an Arab capital and the usual controversy is over how many Israelis show up. This year, there are so many different Arab worlds, one in political transition away from autocracy, the other still solidly autocratic, and the third profoundly troubled by the old conflicts.

That is part of the reason we are in Istanbul, where 1,000 business and political leaders are gathered for a WEF that is now “on the Middle East, north Africa and Eurasia.” The other might be that the WEF has come where Recep Tayyip Erdogan, Turkey’s prime minister, will no longer tread – he vowed never to return to Davos after storming off stage in 2009 in a heated debate on Gaza.


The three faces of the Arab world are all well represented here – the new is Tunisia, whose Islamist prime minister, Hammadi Jebali, this morning delivered a speech urging regional states and companies to put their money, and faith, in the nascent democracy. Opening remarks were also made by Mahmoud Abbas, the Palestinian prime minister, who lamented the moribund peace process and the continuing Israeli occupation but also took the opportunity to tell fellow Arabs and Turks that Palestine is open for business. Investment, he said, consolidates the “steadfastedness” of the Palestinian people and promotes peace.

Turkey tries out soft power in Somalia

Richard LOUGH    REUTERS


* Ankara wields soft power, hard cash in stricken state
* Famine in Somalia sparked huge Turkish relief effort
* Somali PM calls Turkey "Holy Grail" for his country
* Somalia part of Turkish Africa strategy


MOGADISHU, (Reuters) - In a sprawl of plastic refugee shelters and mortar-blasted buildings in Mogadishu, a mud-caked Turkish engineering team monitors the drilling of a new borehole while their armed guards chat lazily under a tree, guns across laps.

These government contractors are on the frontline of a huge Turkish development effort in one of the world's most dangerous cities - one which U.N. agencies and international charities prefer to deal with from the safety of neighbouring Kenya.

Across the Somali capital, a bombed-out shell after two decades of fighting, residents say Turkey has done more in eight months to shatter the perception that Mogadishu is a no-go zone than the international community has achieved in twenty years.

"Our government likes to help anyone in crisis so we came here without thinking anything," said the lead engineer, Mehmet, who asked Reuters to use a pseudonym because government employees are not authorised to talk to the media without permission.

The retreat of al Qaeda-linked rebels from the city in August ended the daily street battles and shelling between the militants and African troops, and offered a rare chance to ramp up aid as a famine gripped central and southern Somalia.

Some 500 Turkish relief workers and volunteers poured into Mogadishu's bullet-scarred wastelands, unleashing a wave of humanitarian aid as the militants struck back with a string of suicide bombings and roadside blasts.

"Of course it is dangerous but we don't think about those things. Inshallah, nothing has happened to us. If we are afraid, we can't operate," the engineer said

Turkish flags - white crescent moon and star on red background - flutter in the coastal breeze and billboards marking out Turkish reconstruction projects dot the capital, where potholed streets are lined by rubble-strewn ruins and mountains of garbage.

South Korea revisits Turkish nuclear power plant bid

Ümit ENGINSOY       Hürriyet Daily News

South Korea has decided not to require Turkey to provide treasury loans, which was the main obstacle preventing the two sides from reaching a final deal on Turkey’s second nuclear deal two years ago, a South Korean official said May 25.

Treasury loans are guarantees to finance well-defined and time-limited business when a country cannot fund the very high costs of a project with its own resources. Turkey’s program to build a nuclear power plant in the northern province of Sinop would cost between $10 billion and $20 billion depending on whether the plant will have two or four reactors.

Turkey and South Korea came close to an agreement on Turkey’s northern nuclear plant in November 2010, but could not agree mainly because of the treasury loans issue. Turkey then launched rival talks with Japan, but these were delayed last year because of the Fukushima disaster. The Fukushima Daiichi nuclear disaster was a series of equipment failures, nuclear meltdowns and releases of radioactive materials at a power plant, resulting from a very strong earthquake and tsunami.

Because of the disaster, Turkey is now engaged in competing talks with Japan, South Korea, China and Canada to build the Sinop nuclear power plant.

“Kepco is much keener about the Turkish deal than it was two years ago, when we could not reach a deal at the last moment,” the South Korean official said. “Kepco has desisted from requiring the treasury loan. It also has agreed to help Turkey find a loan in the international credit markets.”

Iraqi Kurdistan to push ahead with oil export plan

REUTERS

New pipeline to Turkey will open in August, deepening Iraq's broader crisis over power-sharing and the economy

Iraq's autonomous Kurdistan region said on Sunday it expects to start exporting its crude oil along a new pipeline to the Turkish border by August 2013, defying Baghdad in a long-running dispute over who controls the country's oil sales.

The Kurdistan region, which has its own government and armed forces, has already clashed with Iraq's central government over autonomy and oil rights, and halted its crude exports in April after accusing Baghdad of not making due payments.


 "In August 2013 we will be able to directly export crude from the Kurdish region's fields," Hawrami said at an oil conference in Kurdistan on Sunday. "We will be responsible for exporting oil. It will still be Iraqi oil." 
The dispute between Baghdad and the Kurdish capital Arbil is part of a broader political crisis in Iraq, where a fragile government amoung Shi'ite, Sunni and Kurdish blocs is struggling to overcome deep splits over power-sharing. 


Baghdad says only the central government's oil authorities have the right to control oil exports, and dismisses contracts signed with the Kurdistan Regional Government as illegal, while the KRG says it has the right to develop its own oil fields.

The energy wars heat up

Michael KLARE*     Le Monde Diplomatique

Six recent clashes and conflicts on a planet heading into energy overdrive

Conflict and intrigue over valuable energy supplies have been features of the international landscape for a long time. Major wars over oil have been fought every decade or so since World War I, and smaller engagements have erupted every few years; a flare-up or two in 2012, then, would be part of the normal scheme of things. Instead, what we are now seeing is a whole cluster of oil-related clashes stretching across the globe, involving a dozen or so countries, with more popping up all the time. Consider these flash-points as signals that we are entering an era of intensified conflict over energy.

From the Atlantic to the Pacific, Argentina to the Philippines, here are the six areas of conflict — all tied to energy supplies — that have made news in just the first few months of 2012:

* A brewing war between Sudan and South Sudan: On April 10th, forces from the newly independent state of South Sudan occupied the oil center of Heglig, a town granted to Sudan as part of a peace settlement that allowed the southerners to secede in 2011. The northerners, based in Khartoum, then mobilized their own forces and drove the South Sudanese out of Heglig. Fighting has since erupted all along the contested border between the two countries, accompanied by air strikes on towns in South Sudan. Although the fighting has not yet reached the level of a full-scale war, international efforts to negotiate a cease-fire and a peaceful resolution to the dispute have yet to meet with success.

Turkey to start northern Cyprus drilling

UPI 


Turkey will start drilling for oil and gas in northern Cyprus this month despite opposition from Greek Cypriots, the north's energy minister says.

Turkish Republic of Northern Cyprus Economy and Energy Minister Sunat Atun said Tuesday in Istanbul that the Turkish Petroleum Corp. will launch the land-based drilling initiative at the end of April, the Anatolian News Agency reported.

"Drilling will be launched in one area now but it could be extended if the need arises," Atun said, adding that Turkish Energy and Natural Resources Minister Taner Yildiz would attend a ceremony to mark the launch the effort.

The announcement came amid growing tensions in the eastern Mediterranean between Turkey and Greek Cypriots after Nicosia last year began natural gas and oil exploration in its own exclusive economic zone.

Ankara, in response, deployed warships to the area, and, in a tit-for-tat move, signed an agreement with the Turkish Cypriots to delineate the continental shelf between the two counties -- although Turkey is the only country that recognizes the Turkish Republic of Northern Cyprus -- with the aim of enabling Turkish Petroleum to carry out seismic research and offshore oil exploration.

Thailand, Saudi Arabia, Indonesia and Turkey make their mark in Africa

Keyur PATEL      The Financial Times

The Bric countries are making headlines in Africa but when it comes to doing business there are plenty of other emerging economies that are also digging deep into the fast-growing continent.
Standard Bank highlights the EM 10 – ten emerging economies that have seen their trade triple in the last decade to $330bn. The big four are the Brics, with a $250bn share in 2011, but the remaining six states between them account for a full $80bn – and are seeing their activities grow faster than the Brics.
The six states include two African nations, Nigeria and South Africa, which is a bit of a cheat. The others won’t come as a surprise to beyondbrics readers -  Indonesia, Saudi Arabia, Thailand, and Turkey. But it’s worth noting how diverse Africa’s trade is becoming.

Standard Bank analyst Simon Freemantle wrote in a research note on Friday:

"The BRIC thesis, while neatly encapsulated in a powerful acronym, has become increasingly insufficient in explaining the broad sweep of new partnerships Africa is forging in a postcrisis world. Other large, fast-growing and dynamic emerging markets are increasingly partnering Africa’s commercial reinvigoration"

“Insufficient” might be a bit of a stretch. Standard Bank’s research shows that China, India and Brazil make up more than three-quarters of Africa’s trade with the EM 10 – China alone accounts for almost half. (Russia, by comparison, is relatively small).

                                         Sources: COMTRADE Standard Bank Research

Azerbaijan Makes Massive Israeli Weapons Purchase -- But Not Because Of Iran

Joshua KUCERA    EurasiaNet

Azerbaijan has agreed to buy $1.6 billion in weapons from Israel, a massive deal that is likely Azerbaijan's largest single arms purchase ever. The deal will include drones, anti-aircraft and missile defense systems, Israeli officials have told news agencies. The deal would be almost equal to Azerbaijan's stated 2012 defense budget of $1.7 billion (though will certainly be spread out over many years).
The timing of the deal is misleading: regardless of the ongoing ratcheting up of tension between Israel and Iran, and increasing attention to Israel's intelligence activities in Azerbaijan, these weapons are destined to be used not against Iran, but against Armenia, which controls the breakaway Azerbaijani territory of Nagorno Karabakh. Though it's tempting to think otherwise. The AP reports:

Israeli defense officials Sunday confirmed $1.6 billion in deals to sell drones as well as anti-aircraft and missile-defense systems to Azerbaijan, bringing sophisticated Israeli technology to the doorstep of archenemy Iran.
The sales by state-run Israel Aerospace Industries come at a delicate time. Israel has been laboring hard to form diplomatic alliances in a region that seems to be growing increasingly hostile to the Jewish state.
Its most pressing concern is Iran's nuclear program, and Israeli leaders have hinted broadly they would be prepared to attack Iranian nuclear facilities if they see no other way to keep Iran from building bombs...
As Iran's nuclear showdown with the West deepens, the Islamic Republic sees the Azeri frontier as a weak point, even though both countries are mostly Shiite Muslim.