Identifier
Created
Classification
Origin
10ANKARA127
2010-01-26 13:12:00
CONFIDENTIAL
Embassy Ankara
Cable title:
NO MAJOR DEVELOPMENTS ON SOUTH PARS DEAL OR
how-toVZCZCXRO8047 PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR DE RUEHAK #0127/01 0261312 ZNY CCCCC ZZH P 261312Z JAN 10 FM AMEMBASSY ANKARA TO RUEHC/SECSTATE WASHDC PRIORITY 1850 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEHAH/AMEMBASSY ASHGABAT PRIORITY 1985 RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000127
SIPDIS
E.O. 12958: DECL: 01/22/2020
TAGS: ENRG EPET ECON PREL TU
SUBJECT: NO MAJOR DEVELOPMENTS ON SOUTH PARS DEAL OR
TURKMEN GAS VIA IRAN
REF: A. 2009 ANKARA 1566
B. ANKARA 27
Classified By: DCM Doug Silliman for reasons 1.4 (b,d).
C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000127
SIPDIS
E.O. 12958: DECL: 01/22/2020
TAGS: ENRG EPET ECON PREL TU
SUBJECT: NO MAJOR DEVELOPMENTS ON SOUTH PARS DEAL OR
TURKMEN GAS VIA IRAN
REF: A. 2009 ANKARA 1566
B. ANKARA 27
Classified By: DCM Doug Silliman for reasons 1.4 (b,d).
1. (C) SUMMARY: Despite a brief "Oil and Gas Journal" news
report from Paris January 8th of a recent Turkey-Iran gas
agreement, GOT and Turkish Petroleum Company (TPAO) officials
tell us there have been no significant developments or
changes regarding their dealings on either South Pars gas
field development or importing Turkmen gas through Iran. END
SUMMARY.
NO NEW DEAL ON SOUTH PARS GAS DEVELOPMENT
--------------
2. (C) Post has reconfirmed that Turkey and Iran have not
signed a final agreement on Turkish Petroleum Company (TPAO)
development of South Pars blocks. On January 19, TPAO GM
Mehmet Uysal told EconCouns and EconOff the company continues
to negotiate on the technical aspects of a possible deal
according to the MOU extension signed on PM Erdogan and
Energy Minister Yildiz's visit to Tehran October 26-27
(reftel A). Uysal said TPAO will report to Yildiz by mid
February regarding the outcome of the negotiations and the
"red lines" of TPAO's requirements for a contract. He said
the Ministry of Energy will then try to negotiate the
contract within TPAO's "red lines." Uysal told us no
significant parameters of the deal being considered have
changed: they are looking at two central blocks and an
investment in the range of $3.5 - 4 billion. (Note: As in
all prior conversations, Uysal has not been optimistic of
reaching agreement on the technical aspects of the deal. He
gave no indication on January 19 that his level of optimism
had changed in either direction. End note.) Berris Ekinci,
head of the MFA Energy Department, confirmed for us again
January 22 that no agreement on South Pars was signed when
Yildiz attended the January 6 opening ceremony for the new
Turkmen-Iran natural gas pipeline.
INTEREST BUT NO DEAL - OR DETAILS - ON TURKMEN GAS VIA IRAN
-------------- --------------
3. (C) Although discussions surrounding the January 6
pipeline opening included expressions of positive intentions
to work toward exporting Turkmen gas to Turkey through Iran
(reftel B),no agreement was signed. Ekinci told us again
January 22 that the design and technical details of a
possible deal remain undefined. She said the GOT would still
prefer to import Turkmen gas by a trans-Caspian route, but as
relations with the Azeris have grown difficult, Turkey has
begun to look at other options. Ekinci stressed that
realizing the option of importing Turkmen gas through Iran
would be a long process. Mithat Rende, MFA DG for economic
affairs, told DCM and EconCouns on January 15 that they have
not even reached the stage of deciding how they would move
Turkmen gas through Iran -- whether it would be a swap
agreement or straight transit, nor whether it would be via a
new pipeline or the existing Iranian system. Officials at
the State Pipeline Company (BOTAS) and the Ministry of Energy
and other industry experts continue to remind us that Turkey
does not currently have the capacity to receive more gas from
Iran, and in fact is facing take-or-pay penalties because
infrastructure inadequacies prevent BOTAS from accepting and
transporting even the currently contracted volumes (reftel
B). Regardless of how the deal were designed, it would
require significant investment in both Turkish and Iranian
infrastructure.
4. (C) Rende also complained of the Iranians as negotiators,
saying he spent seven hours with them and could not even
reach agreement on a comma. He described them as
"maximalists, self-confident and proud" in negotiations.
Despite this, he said we have to "think big" on Nabucco. He
explained that the Nabucco deal is "dead" without Turkmen gas
via Iran, since Iraq and Qatar are not feasible near-term
options, and the Azeris can supply only a third of the
necessary volumes. He concluded, "If you don't want Turkmen
gas into Nabucco via Iran, give us an alternate route,"
suggesting we press the Azeris to agree to a trans-Caspian
route.
5. (C) On January 26, EconOff and EconSpecialist asked
Ibrahim Arinc, advisor to Yildiz, about speculation that a
private Turkish company, Som Petrol, was planning to exercise
a 1 billion cubic meter (bcm) contract it holds from
Turkmenistan to import gas via the new Turkmen-Iran pipeline
and through Iran to Turkey. Arinc said he did not know about
such a contract, but he did confirm that Som has a contract
with the National Iranian Oil Company (NIOC) to import gas
ANKARA 00000127 002 OF 002
into Turkey and then export it on to Europe. He noted that
Som would face technical challenges regarding infrastructure
deficiencies in both Turkey and Iran, though as a private
company they might face fewer political challenges.
Jeffrey
"Visit Ankara's Classified Web Site at http://www.intelink.s
gov.gov/wiki/Portal:Turkey"
SIPDIS
E.O. 12958: DECL: 01/22/2020
TAGS: ENRG EPET ECON PREL TU
SUBJECT: NO MAJOR DEVELOPMENTS ON SOUTH PARS DEAL OR
TURKMEN GAS VIA IRAN
REF: A. 2009 ANKARA 1566
B. ANKARA 27
Classified By: DCM Doug Silliman for reasons 1.4 (b,d).
1. (C) SUMMARY: Despite a brief "Oil and Gas Journal" news
report from Paris January 8th of a recent Turkey-Iran gas
agreement, GOT and Turkish Petroleum Company (TPAO) officials
tell us there have been no significant developments or
changes regarding their dealings on either South Pars gas
field development or importing Turkmen gas through Iran. END
SUMMARY.
NO NEW DEAL ON SOUTH PARS GAS DEVELOPMENT
--------------
2. (C) Post has reconfirmed that Turkey and Iran have not
signed a final agreement on Turkish Petroleum Company (TPAO)
development of South Pars blocks. On January 19, TPAO GM
Mehmet Uysal told EconCouns and EconOff the company continues
to negotiate on the technical aspects of a possible deal
according to the MOU extension signed on PM Erdogan and
Energy Minister Yildiz's visit to Tehran October 26-27
(reftel A). Uysal said TPAO will report to Yildiz by mid
February regarding the outcome of the negotiations and the
"red lines" of TPAO's requirements for a contract. He said
the Ministry of Energy will then try to negotiate the
contract within TPAO's "red lines." Uysal told us no
significant parameters of the deal being considered have
changed: they are looking at two central blocks and an
investment in the range of $3.5 - 4 billion. (Note: As in
all prior conversations, Uysal has not been optimistic of
reaching agreement on the technical aspects of the deal. He
gave no indication on January 19 that his level of optimism
had changed in either direction. End note.) Berris Ekinci,
head of the MFA Energy Department, confirmed for us again
January 22 that no agreement on South Pars was signed when
Yildiz attended the January 6 opening ceremony for the new
Turkmen-Iran natural gas pipeline.
INTEREST BUT NO DEAL - OR DETAILS - ON TURKMEN GAS VIA IRAN
-------------- --------------
3. (C) Although discussions surrounding the January 6
pipeline opening included expressions of positive intentions
to work toward exporting Turkmen gas to Turkey through Iran
(reftel B),no agreement was signed. Ekinci told us again
January 22 that the design and technical details of a
possible deal remain undefined. She said the GOT would still
prefer to import Turkmen gas by a trans-Caspian route, but as
relations with the Azeris have grown difficult, Turkey has
begun to look at other options. Ekinci stressed that
realizing the option of importing Turkmen gas through Iran
would be a long process. Mithat Rende, MFA DG for economic
affairs, told DCM and EconCouns on January 15 that they have
not even reached the stage of deciding how they would move
Turkmen gas through Iran -- whether it would be a swap
agreement or straight transit, nor whether it would be via a
new pipeline or the existing Iranian system. Officials at
the State Pipeline Company (BOTAS) and the Ministry of Energy
and other industry experts continue to remind us that Turkey
does not currently have the capacity to receive more gas from
Iran, and in fact is facing take-or-pay penalties because
infrastructure inadequacies prevent BOTAS from accepting and
transporting even the currently contracted volumes (reftel
B). Regardless of how the deal were designed, it would
require significant investment in both Turkish and Iranian
infrastructure.
4. (C) Rende also complained of the Iranians as negotiators,
saying he spent seven hours with them and could not even
reach agreement on a comma. He described them as
"maximalists, self-confident and proud" in negotiations.
Despite this, he said we have to "think big" on Nabucco. He
explained that the Nabucco deal is "dead" without Turkmen gas
via Iran, since Iraq and Qatar are not feasible near-term
options, and the Azeris can supply only a third of the
necessary volumes. He concluded, "If you don't want Turkmen
gas into Nabucco via Iran, give us an alternate route,"
suggesting we press the Azeris to agree to a trans-Caspian
route.
5. (C) On January 26, EconOff and EconSpecialist asked
Ibrahim Arinc, advisor to Yildiz, about speculation that a
private Turkish company, Som Petrol, was planning to exercise
a 1 billion cubic meter (bcm) contract it holds from
Turkmenistan to import gas via the new Turkmen-Iran pipeline
and through Iran to Turkey. Arinc said he did not know about
such a contract, but he did confirm that Som has a contract
with the National Iranian Oil Company (NIOC) to import gas
ANKARA 00000127 002 OF 002
into Turkey and then export it on to Europe. He noted that
Som would face technical challenges regarding infrastructure
deficiencies in both Turkey and Iran, though as a private
company they might face fewer political challenges.
Jeffrey
"Visit Ankara's Classified Web Site at http://www.intelink.s
gov.gov/wiki/Portal:Turkey"