President vetoes new Turkish Petroleum Law
President Ahmet Necdet Sezer notes that no activity can be held above national security interests, including oil production. The president vetoed a bill regulating the export of oil and petroleum products on Tuesday, citing risks to national security.
President Ahmet Necdet Sezer's explained the reasons for his veto saying that the bill made crude oil – a resource of strategic importance – subject to exporting activities, thus creating a risk for national security, the presidential press office said on Tuesday.
The statement compared the bill to an older law dating back to the year 1954. The first article of the proposed law aims to improve and expand oil production while its third article proposes regulating the licensing of oil production and resale but did not stipulate that national interests would be made a priority to achieve its stated purpose. The article also would call for review of license applications, which are mentioned in relevant articles of the 1954 oil law. Details about how national interests would be protected were also excluded in other articles of the stipulated law, in contrast to the two articles in the 1954 law that prescribe methods of securing national interests in detail.
The statement also said the proposal went against an article in the constitution which stipulates that no activity could be held above national security interests. “In other words, the fact that the protection of national interest is not being explicitly mentioned in the law obviously does not eradicate the responsibilities and duties of state agencies assigned to them by the Constitution. These agencies and officials are under the obligation of preserving national interests and public good as a priority in every activity and procedure.
Undoubtedly, this responsibility is larger when the products in question are of high strategic value such as oil and natural gas resources.”Sezer said the proposed law did not explicitly clarify the percentages of petroleum and natural gas products to be allotted for domestic use or exports, allowing these products to be sold to other countries without regard to the domestic consumption requirements.
Another reason for the veto was ambiguity in the percentage of state ownership of oil produced in the country.
The president, who said resources located in the country's territory belonged to the entire nation, urged the introduction of limitations on exportation of crude oil and natural gas in the proposed law.
Oil production in TurkeyOil provides over 40 percent of Turkey's total energy requirements, but its share is declining as the share of natural gas rises.
Around 90 percent of Turkey's oil supplies are imported, mainly from the Middle East and Russia. Turkey's port of Ceyhan is a major outlet for Iraqi oil exports, but oil flows have been sporadic since late March 2003, following the outbreak of the Iraq war.
Three companies account for the majority of Turkey's oil production – the Turkish State Petroleum Company (TPAO), and foreign operators Royal Dutch/Shell (Shell) and ExxonMobil.
In December 2003, a petroleum market reform bill was passed in parliament which aims to remove state controls on the sector, to liberalize the pricing of oil and oil products, end restrictions on vertical integration, and integrate pipelines, refining, and distribution functions.
In early 2004, the Turkish government approved the sale of a 66.76 percent stake in the then state-owned oil-refiner Tüpras for $1.3 billion to a group led by Russia's Tatneft. In late May 2004, a Turkish court suspended the sale after a union filed a lawsuit claiming that privatization procedures were not properly followed.
Turkish Daily News- Istanbul