ISTANBUL: Both the local and global energy sector witnessed a very hectic year. Mining accidents in Turkey, discussions about the transfer of northern Iraqi petrol, efforts to secure an energy supply to end Russia’s monopoly in the global natural gas market and decreasing crude oil prices were the main items on the agenda.
Accidents that occurred at the Soma and Ermenek mines made long-term headlines in Turkey. The worst mining disaster in the history of the Turkish Republic took place on May 13 in the district of Soma in Manisa, where 301 miners lost their lives and 486 were injured, while 18 miners died due to floods that occurred in a coalmine in Ermenek, Karaman.
After these accidents, more than a thousand mines were closed and a revised Occupational Health and Safety Code, which includes new regulations for miners, was submitted for approval to Parliament’s Speaker’s Office. Energy and Natural Resources Minister Taner Yıldız also noted that a Mining Law Bill is about to be submitted to Parliament.
Another important issue was the objection of the Baghdad government to the delivery of crude oil extracted from northern Iraq and delivered to Ceyhan, Turkey for transport to international markets. Yıldız had underlined repeatedly that the crude oil drilled in northern Iraq and stored in Ceyhan belongs to the whole of the Iraqi nation. While the crude oil flow in the Kirkuk-Yumurtalık pipeline was constantly disrupted by terror attacks, northern Iraqi petrol continued to flow to Ceyhan, and the first tanker delivery began at the end of May.
Meanwhile, the terrorist group ISIL continued to march towards energy resources located, in particular, in Iraq and Syria. The August report of the International Energy Agency noted that ISIL had seized seven oil fields in Iraq with a capacity of producing 80,000 barrels of crude oil a day. To prevent ISIL’s progress towards refineries and oil fields in northern regions of Iraq and especially Kirkuk, air strikes targeting ISIL commenced, carried out by coalition forces led by the U.S. Further, peshmerga troops also seized some oil fields in July to protect them from ISIL assault. As a result, “Kirkuk Oil” was added to the agenda of the disagreement on oil between the Erbil and Baghdad governments.
After months of conflict, an agreement was finally reached in November, and Minister Yıldız noted that starting from the end of November, the transfer of 28 million barrels of crude oil on 35 tankers commenced.
Another matter, perhaps the most important one, that occupied the global agenda was the swift decrease in Brent crude oil prices, which stood around $115 in June. After a decision by OPEC to restrict production in December, prices fell to $58, the lowest point in the last five years.
In reply to criticisms that the decrease in global crude oil prices is not reflected in local prices Yıldız said: “A gas tank with a 55-liter capacity can now be filled for less than TL 50 of crude oil and less than TL 40 of diesel oil, which means that all citizens save around $6 billion.”
Various important deals were signed for the Trans-Anatolian Natural Gas Pipeline Project (TANAP), which aims to deliver Azeri gas to Europe through Turkey. In March, expropriation decisions were opened for signature, while in May, Turkey’s share of Şahdeniz natural gas production increased to 19 percent, and its share in TANAP to 30 percent. The foundations of the South Caucasians Gas Corridor, which is the starting point for the project, were laid in Baku.
The crisis in Ukraine increased the probability of Russia interrupting the flow of natural gas it provides to Europe via Ukraine; therefore, diversity in energy resources and the safety of natural gas supplies became a major issue discussed in the European Union. The E.U. Commission announced in March that the South Stream Project, which would have transferred Russian gas through the Black Sea to European markets, was suspended. This decision by Russia increased interest in alternative projects for delivering gas to Europe.