Wednesday, October 14, 2009

Turkey sacks head of state pipeline company Botas

Wed Oct 14, 2009 4:50pm IST,
* Source says will not affect Turkey commitment to Nabucco
* Dismissal over domestic policy - analysts

ANKARA, Oct 14 (Reuters) - The Turkish government has sacked the head of pipeline operator Botas, a partner in the $11.8 billion Nabucco natural gas pipeline project, according to the Official Gazette on Wednesday.

The state-run newspaper did not provide a reason for Saltuk Duzyol's dismissal, but a Botas source said that Turkey and Botas' commitments were firm to the 31 billion cubic metre pipeline, conceived to ease Europe's dependence on Russian gas.

"The removal of the Botas general manager will in no way impact Turkey's stance concerning Nabucco," a source at Botas said on condition his name not be used.

"Turkey considers Nabucco a major project in the field of energy. Turkey is determined to fulfil all commitments it has undertaken with the July 13 accord," the source said.

Nabucco is in competition with Russian rival South Stream, which is trying to lock in Moscow's share of the gas market. The European Union-backed pipeline, however, is lacking supply commitments, making it a riskier undertaking without necessary political backing.

Duzyol became general manager and chairman at Botas in December 2007 after serving as deputy chairman from 2004, according to Botas' website.

He served through a rocky period in the Nabucco project when Turkey was demanding 15 percent of the line's throughput for domestic use or re-export, which caused major rifts among the Nabucco consortium members. The demand was subsequently dropped.

Botas has played a key role in trying to turn Turkey into an hub for European oil and gas supplies through a series of pipeline projects.

Analysts said his dismissal reflected splits over domestic policy.

"He was not in line with the administration's policies. Regarding certain issues, he was a setback for the ministry," said independent energy analyst Haluk Direskeneli.

"He wanted to keep Botas a powerful player in the (domestic) market and he was against the administration's policy of unbundling of Botas and selling contracts to private gas companies," said Direskeneli.

Turkey is trying to reduce Botas' gas import contracts to 20 percent of the market.

Botas, which imports almost all of Turkey's natural gas from Russia, Iran and Azerbaijan and most of its oil, has struggled to recoup some 10 billion lira ($6.9 billion) it is owed, almost all from state-owned power plants.

Nabucco's other shareholders are OMV (OMVV.VI: Quote, Profile, Research) of Austria, Germany's RWE (RWEG.DE: Quote, Profile, Research), Hungary's MOL MOLB.BU, Romania's Transgaz TGNM.BX and Bulgaria's Bulgargaz. (by Orhan Coskun, Additional reporting by Thomas Grove and Ayla Jean Yackley; writing by Thomas Grove)


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