ISTANBUL: Azeri Socar is in talks with Austrian OMV’s Petrol Ofisi to buy into its aviation fuel business, industry sources said, as the state energy company aims to expand into Turkey’s fast-growing fuel sector.
A source close to the SOCAR-Petrol Ofisi talks said negotiations had been under way for some time and were likely to be concluded in early August. It was not clear how much of a stake Socar might take in Petrol Ofisi.
Petrol Ofisi declined to comment on the talks or to give figures for its share of the Turkish fuel market. Socar already has major investments in Turkey. It owns Turkish petrochemical company Petkim and is building a $5bn refinery in western Turkey in partnership with Turcas Petrol to supply Petkim and meet booming domestic demand.
The Azeri company also controls the $8bn Trans-Anatolian natural gas pipeline project, aimed at taking Azeri gas to Turkey and markets in Europe.
A subsidiary of Socar, Socar Turkey Petrol Enerji Dagitim, obtained a licence for fuel distribution earlier this year, Turkish energy watchdog records show.
The company has snapped up at least four members of staff from Petrol Ofisi’s downstream team, who handled aviation, commercial bunkering and marine sales, industry sources said.
“Socar’s been eyeing Turkey’s retail sector for some time, obviously for the growth story, and it looks like they’re slowly making their way,” an industry source close to the company said.
Turkey imports almost all of its energy needs, which are rising rapidly.
It is set to overtake Britain within a decade as Europe’s third biggest electricity consumer. Jet fuel demand is set to soar due to growing passenger traffic, which is likely to get a big boost towards the end of the decade when Istanbul’s planned third airport opens.
Turkey hopes the ¤22bn ($29bn) airport will become one of the world’s largest, handling 150 million passengers per year, more than double the current traffic of all Turkish airports.
In the first half of this year, more than 66 million passengers passed through Turkey’s airports, over 15 percent more than in the same period last year. Half of them arrived at Istanbul airports.
OMV first entered the Turkish energy market in 2006 when it bought shares in Petrol Ofisi, Turkey’s largest chain of petrol stations. It then increased its stake in the company to 97 percent in 2010.
The company has been active in the jet fuel market for more than four decades, it said on its website, supplying more than 140,000 aircraft a year at over 100 domestic and international airlines.
Turkey’s sole refiner Tupras sold about 3.3 million tonnes of jet fuel into the domestic market last year, a rise of around 20 percent from 2011. Analysts say the refiner’s sales on average account for at least 55 to 60 percent of Turkey’s total market for refined oil products but in jet fuel its market share could be higher.
Source: http://thepeninsulaqatar.com
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