Caspian Energy Journal Caspian European Club
Monday, 05 June 2017 12:30

Caspian countries play a special role for Turkey, Ambassador of the Republic of Turkey to the Republic of Azerbaijan Erkan Ozoral Featured

 Caspian Energy (CE): Your Excellency, you arrived in Azerbaijan about a year ago. How would you assess the relations between Turkey and Azerbaijan? What do you think about their potential?

Ambassador Extraordinary and Plenipotentiary of the Republic of Turkey to the Republic of Azerbaijan Erkan Ozoral: The political relations between the two countries are at the highest level, because we have very close brotherly relations with Azerbaijan. This is more than strategic partnership. Turkey and Azerbaijan always support each other in the international arena. We stand shoulder to shoulder every time. But regarding economic issues, I believe we still have a potential for further growth. We should make new steps to further deepen our economic relations, and also in the field of culture we have a potential for growth and development.

CE: Which possibilities do you see in the field of economics?

Erkan Ozoral: In the field of economics we have potential in almost all areas of economy, first of all, in the field of trade, for example. However, about 2 years ago the trade turnover between our countries was higher, but in the last years it has decreased because of the global economic situation and the economic situation in Turkey and Azerbaijan. On the other hand, Turkey and Azerbaijan need new investment. Actually, the Turkish businessmen are now the largest group, who invest in the non-oil sector of Azerbaijan. But we believe we still have a potential, because Azerbaijan is a very promising country. Azerbaijan has a big potential, because it is located in a very strategic position. At the same time the population of the country is small. Azerbaijan has possibilities to utilize. For instance, Azerbaijan has free trade regulations with the CIS countries. That is why even more investments can be attracted from Turkey and other countries to Azerbaijan. That is why the Embassy of the Republic of Turkey is encouraging the Turkish businessmen to invest more and develop the manufacturing sectors in Azerbaijan.

CE: Could you please specify the amount of Turkey’s investment into Azerbaijan?

Erkan Ozoral: Turkish investments in Azerbaijan stand at $10 billion. And there are ongoing projects in energy sector as well. So the investments are continuing. On the other hand, Azerbaijan is the biggest foreign investor in Turkey. After accomplishing the STAR Refinery in Izmir the total amount of Azerbaijani investment in Turkey will reach $20 billion, and that will make Azerbaijan the biggest investor in Turkey. We can also encourage our people to open up new possibilities in the field of tourism. Since Turkey and Azerbaijan share the common history and common culture, our peoples are very close and we can encourage Turkish tourists to visit Azerbaijan, create some new routes. Over the past ten years Azerbaijan has made significant progress in the field of tourism, it is not yet well known in Turkey, but we can make use of this potential as well.

CE: Which type of tourism is the most attractive for Turkey?

Erkan Ozoral: Tourism is a sector, which is encouraged by the Government of Azerbaijan. I believe all sectors of tourism are encouraged. The Turkish people like historical places and Azerbaijan has an abundance of them. At the same natural beauties are also attractive for the Turkish tourists. Azerbaijan has many. We can encourage winter tourism, for example.

Turkey is keen on establishing a free trade zone

CE: Mr. Ozoral, you mentioned the free trade regulations with the CIS countries. How do you assess the possibility of establishing free trade zones between our countries?

Erkan Ozoral: Turkey is keen on establishing a free trade zone between Azerbaijan and Turkey. The first step to make these plans a reality will be signing of a preferential trade agreement.  We are targeting a free trade agreement, but we started with a preferential trade agreement. This agreement is currently under negotiations between the ministries of economy of the two countries. Agriculture will surely be a part of this agreement and the manufacturing industry as well.

CE: Could you please tell about Turkey’s expectations from the commissioning of the new Baku-Tbilisi-Kars rail line?

Erkan Ozoral: The Baku-Tbilisi-Kars railroad is just a small part of a big project which connects Shanghai with London. It is a missing and very important part. We hope it will be operational this June. The construction work is still going on. Turkey will host a big commissioning ceremony. 

Revitalizing the Silk Road means the unification of the West and the East again

CE: Recently President of Turkey Recep Tayyip Erdogan had a meeting with President of China Xi Jinping. Could you please tell about regional agreements they reached during this visit?

Erkan Ozoral: The aim of President Recep Tayyip Erdogan’s visit to China was to attend the Belt and Road Forum for International Cooperation. Turkey is one of the supporters of this project. China intends to revitalize the historical Silk Road and plans to invest into all countries lying along this route to support their efforts to revitalize the Silk Road. The Silk Road has not been in use for hundreds of years. Revitalizing the Silk Road means the unification of the West and the East again. The world will meet once again with its other side of the historical development. New routes will be created along the Silk Road. We will support all projects, which aim to create new ways for trade, because we are not yet a transit country and also a big producer on this route.

CE: Continuing the topic of the historical route, Mr. Ambassador, is not it planned to establish lots of free trade zones along the Baku-Tbilisi-Kars line and further into Turkey by analogy with the ancient route?

Erkan Ozoral: It is a good idea to create free trade zones along the route. However, I believe for the time being it is early to talk about this because, first of all, we have to create a route itself. Then we will be able to talk about its other possibilities, after having explored them.

If a free trade zone is not possible, then, of course, a preferential trade zone comes into discussion. As long as the trade grows, the welfare of all countries involved in it also improves.

In recent years Turkey has signed more than 50 free trade agreements with its neighbors and surrounding countries. Actually Turkey is keen on improving the free trade agreements between all these countries. Mainly these are countries that have similar agreements with the European Union. We support the idea of free trade and we are also negotiating with the United States, and we are also discussing this issue with Japan. We are negotiating the agreement with the Southeast Asian countries.

We are negotiating a free trade agreement with the United States

CE: Does Turkey plan to join the Transatlantic Trade and Investment Partnership (TTIP) between the EU and United States?

Erkan Ozoral: No, we are not part of TTIP as far as I know, but we are negotiating a free trade agreement with the United States. As you know, we are a member of the World Trade Organization and within the framework of the World Trade Organization we are encouraging free trade agreements.

Our relations with Turkmenistan are not as extensive as we would like them to see

CE: How do you assess the contribution of Azerbaijan and other Caspian Sea countries to Turkey's energy security?

Erkan Ozoral: Azerbaijan is one the main supplies of oil and gas for Turkey, especially gas. In Turkey 25% of energy demand is met by national resources. We are not an energy exporter but importer. So, Azerbaijan is one of the main suppliers for us, and we are also a transit country for Azerbaijani natural gas to western countries. We are hosting the Baku-Tbilisi-Erzurum gas pipeline, and also the TANAP project, which will enable gas supply to the European countries, is still under construction. We are also supporting the development of the Azerbaijan oil industry. The national oil company of Turkey TPAO has been present in Azerbaijan since its independence. TPAO is a shareholder of the Azeri-Chyrag-Gunashli project and also the Baku-Tbilisi-Ceyhan oil pipeline project. We are supporting these projects and we are a part of them. Also, Azerbaijani SOCAR, as I have already mentioned above, is investing in Turkey. In particular, it is constructing the STAR Oil Refinery in Turkey.

As far as the other Caspian countries are concerned, we have the gas supply agreements in place with them. We buy natural gas from Russia, Iran. Our relations with Turkmenistan are not as extensive as would like them to see. Kazakhstan is also a supplier of oil for Turkey. We are also supporting the efforts of these countries in this regard. Turk Petrolleri is also present in Kazakhstan. Russia is heavily investing into Turkey. Russian companies are constructing the Akkuyu nuclear power plant in Turkey. So, we are committed to diversifying our energy resources and in this regard the Caspian countries play a special role for Turkey.

If Azerbaijan cannot sell gas to the European countries, I believe we have the possibility to buy it

CE: Could you please tell the Turkey’s opinion about the Trans Caspian gas pipeline from Turkmenistan, and perhaps Kazakhstan, to Turkey?

Erkan Ozoral: The Trans Caspian gas pipeline project is still a project, which has been discussed with the other Caspian countries, in particular with Azerbaijan, Turkmenistan and Kazakhstan. I believe all these countries show their interest in this project. I hope it will be implemented soon. As I have already told you, this is an issue for the Caspian countries. Turkey encouraged them to make this idea a reality.

CE: Currently Turkey is turning into a gas hub. It is going to be a grandiose hub, taking into account all the resources from different directions. Which benefits does Turkey expect for its economy?

Erkan Ozoral: Almost 72 % of global oil and gas reserves are located very close to Turkey. Turkey, for its geopolitical location, is in the close neighborhood with regions which have 75% of all proven global oil and natural gas resources. We take part in a number of projects and support them actively which will turn Turkey into an “energy hub” between the oil rich Caspian basin and the Middle East and the European consuming markets. Experts forecast that the global primary energy demand which is expected to rise upto 40 % till 2030 will be met by the sources in this region. Being a hub requires many sources of resources not only from the Caspian region, namely from Russia, Azerbaijan and Turkmenistan, but also from the countries across the Middle East,  from oil and gas fields in the Mediterranean Sea - in Egypt, Israel. We are considering all these possibilities. We are following developments at all fields in those countries. We are also implementing exploration work in the Black Sea. We hope to discover some new resources there. Actually being a hub requires both reliable gas resources and a reliable infrastructure. It requires storage capacities, not only pipelines. We are still trying to create these infrastructure capabilities. For example, the TANAP pipeline is being constructed. TANAP is capable of receiving all this natural gas. Its throughput capacity is large enough to receive all these resources.

CE: Which new possibilities for diversification will the Turkey’s economy receive? Will it raise its competitiveness?

Erkan Ozoral: Economic benefits will be very useful for Turkey because being a hub means being a central market. So that you can have new customers, you can have new relations and, at least, this will give an impetus to the development of Turkey, to the growth of Turkish economy.

At the same time, of course, it will raise competitiveness of Turkish goods in the global market. I belive it will make domestic prices cheaper and more competitive for Turkish investors. It will also secure new advantages for Turkey. Obviously, new gas resources brought to the Turkish market will be of great benefit to the Turkish economy.

CE: Could you please tell about exploration work at Turkish fields in the Black Sea?

Erkan Ozoral: We are implementing exploration works in the Black Sea. We drilled some wells until now, but we could not find any large resources. But, on the other hand, we have seismologic researches, which show prospects to discover new oil and gas fields in the Black Sea. The Black Sea features a very special shelf, special mud, and all the seismic reports give indication of presence of oil and gas.

CE: Could you please tell your opinion about repeated delays in TAP’s implementation? 

Erkan Ozoral: There had been some delays in the implementation of TAP project until now. However, I hope this is over now. As we know, 42% pf the project has been constructed. Only in a small part in Italy, there had been delay because of the discussion about environment. I believe these discussions are over now and the works are going on even in this part in Italy. Main benefiters of the TAP project will be European countries. TAP is part of a big project namely Southern Gas Corridor (SGC). The SGC project consist of four phases. Shahdeniz-II, Trans Caucasian Pipeline Project, TANAP and TAP. It is foreseen to meet natural gas demand of European countries. It will make a big contribution for diversification of energy resources of the European energy market. All parts of SGC project are now under construction and there is a high level of realization for all phases. It is more than 80 % for all the first three phases. I hope TAP will also have the same rate soon and the SGC will be operational in 2020 as planned.

CE: Which other options does Turkey consider to reduce its dependence on imports?

Erkan Ozoral: We are trying to diversify our energy resources apart from diversification of gas resources. We are also working hard on alternative energy resources such as wind, solar energy and also nuclear energy. We are widely using our hydro energy potential. We are building new dams. Construction of the first nuclear plant has already been started and preparations are underway for the second one.

CE: What will be the share of alternative energy resources in the energy mix of Turkey until 2020?

Erkan Ozoral:  As a constantly growing economy, Turkey’s energy demand is also growing. We attach great importance making more use of alternative and renewable energy resources. The country produced 32.1% of its electricity by using natural gas, 33.9 %  coal, 24,7% hydraulic power, 5,7 wind, 1.8% from geo-thermal energy resources and 1,8 % from other resources in 2016. Our aim is meeting at least 30 % of the demand by using renewable energy sources by the year 2023.

CE: It is close to the European standard…

Erkan Ozoral: Yes. For example, solar energy and wind energy are dependent on a geographical situation of any country. The Middle East countries have more potential for solar energy and Europeans have less potential. That is why we will be even ahead of the European countries. We can be compared with the Mediterranean countries in terms of our potential. 

CE: This is one more topic for cooperation with the European Union?

Erkan Ozoral:  Yes.

CE: Could you please tell about prospects that Turkey has now for development of its economic relations with the European Union? Which countries are your main trade partners in the EU?

Erkan Ozoral: Our trade relations with the European countries are mostly regulated by the agreements with the European Union. As you know, we have the Customs Union agreement with the European Union, and the European countries and the EU member countries are the biggest trade partners of Turkey. Their share in our foreign trade is more than 50%. We are also trying to make a review of the Customs Union agreement with the European countries, which will give more impetus to our trade relations. Especially Germany is our biggest trade partner among the European countries. We also have intensive relations with the UK, France and Italy.

CE: In this connection, how will Вrexit affect the EU-Turkey relations, economic projects with Azerbaijan?

Erkan Ozoral:  I think it will affect our economic relations with the UK.

We have a different situation with Azerbaijan unlike our relations with the European Union. As I have already mentioned, we have the Customs Union agreement with the European Union, which Azerbaijan does not have. That is why effects for Azerbaijan will be different than those for Turkey.

As for the effects of Brexit, at first we have to see the conditions of an exit, which will be discussed between the European Union and the UK. I do not think Britain will remove all its trade relations with the European Union. I do not think they will reshape them. But we are still to see what these regulations will be like, and namely those regulations will affect Turkey’s relations with the European Union and also Azerbaijan’s trade relations with the European Union.

Brexit will surely have effects. We will see effects as soon as conditions for the UK's leaving the EU are agreed upon.

CE: What about the upcoming elections in Germany? Can they also cause certain instability?

Erkan Ozoral: Of course. All the political developments in Europe will affect. We are concerned about the arising radical right in Europe and we are also witnessing that Europe “turns into inside” more than in earlier times. I mean the European countries introduce more and more protective measures in their relations with all other countries and they create new barriers for others. I see barriers, cultural barriers that are affecting Europe’s relations with all other countries. Many Muslim people in the Middle East do not want, for example, to go to Europe nowadays.

CE: How to struggle against protectionism?

Erkan Ozoral:  First of all, we can struggle against protectionism by cultural means. We have to respect all cultures. We have to respect other people who are not like us and at least try to understand others. We have to cooperate more and more with others.

CE: What do you think about economic protectionism?

Erkan Ozoral:  Economic protectionism is a kind of political protectionism. That is why I tell we have to respect others…

CE: Does Turkey feel the effects of protectionism now?

Erkan Ozoral:  Not yet. We do not feel it yet. As long as the crisis is ongoing, I mean the economic crisis, as long as the world is facing the problem of terrorism, as long as the radical right trends are overwhelming Europe, such kind of protectionism also affects us indirectly. These all must be struggled together in a very concerted way and within the framework of a global concept.

We would like to see the Turkey-EU relations based on a real basis

CE: Given what you said, do you think, Mr. Ambassador, does Turkey have any prospect to join the European Union? Or for the time being it is impossible?

Erkan Ozoral: I cannot tell you that it is totally impossible. The prospects for the participation of Turkey in the European Union are higher than, for example, 10 years ago. Europe will always be our biggest neighbor. We have to cooperate with the European countries and they have to cooperate with us. Turkey is a part of Europe. Both sides have to cooperate with each other. That is why we aim cooperation as close as possible.  The highest level of this cooperation will be a membership in the European Union.

 CE: Emmanuel Macron has been recently elected a President of France. How positive is this election in the framework of the Turkey-Azerbaijan-EU relations?

Erkan Ozoral: President Makron is the supporter of the European idea. We hope he will also support Turkey’s relations with Europe and France will pursue good relations with Turkey as it used to be in the past. We would like to see the Turkey-EU relations based on a real basis. Both sides have their realities, their ideas. Both sides must respect eash other. Europe must fullfill its promises for Turkey and we hope that President Macron will support this cooperation indepently from interventions of the third parties.

CE: Is this the case for Germany as well?

Erkan Ozoral: This is the case for Germany too. As I told you we have very close economic relations with Germany. More than 2 million Turkish people live in Germany. So, this is also the case for Germany.

CE: So, you expect a positive upward trend in the development of the relations between the European Union, Azerbaijan and Turkey …

Erkan Ozoral:  I hope so.

Thank you for the interview


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