Turkey seeks to widen oil supplier base

Turkey is currently seeking to raise the number of countries which it could tap for its oil requirements and current crude oil prices could be key factor in reaching a mutual decision.

A few days ago, representatives from Saudi Arabia met with Turkey’s officials to discuss prospects of forging a deal whereby Turkey will purchase crude oil from the Kingdom on a long-term basis.

Turkey is one of those countries which the U.S. excluded from financial sanctions as the former complied with US-led initiatives urging countries to stop oil imports from Iran. Other countries which were granted similar exemptions include South Korea and India.

Taner Yildiz, Energy Minister of Turkey, said that widening its base of oil suppliers is currently one of the energy sector’s chief concerns. The on-going talks with Saudi are one important step towards achieving this.

According to Yildiz, both countries will negotiate on the volume of oil to be supplied by Saudi and, apparently, part of the bargain may include how crude oil prices will be pegged. Turkey’s lone refinery, Turkey Petroleum Refinery Company (Tupras) and Saudi’s oil company Aramco, which are both state-owned, will certainly be involved in the discussions and ensuing negotiations.

On the question of whether or not Turkey would be able to strike a good deal in terms of Saudi oil price, Yildiz mentioned that Tupras will definitely review crude oil prices per barrel before coming up with a decision.

At present, Turkey gets its natural gas supply from five countries and seeks two or three more suppliers.  Meanwhile, 11 countries supply its crude oil requirements, and it’s looking at three more possible suppliers. Libya could be one of them, said Yildiz. Tupras intends to purchase oil with volumes of up to 1.1 million tons.

Yildiz added that the country’s rising oil requirements will have to be prioritized along with its quest for reasonably priced oil.

Aside from Saudi Arabia, Turkey has also tapped Venezuela for its oil requirements. Under the deal with Venezuela, Turkey will be supplying manpower in exchange for supplies of petroleum coke, a fuel for many industrial applications. Turkish contractors have actually been mobilized in Caracas, Venezuela, and have so far constructed 1,500 housing units. Around 350,000 units will have to be completed per agreement.