Tuesday, 23 October 2012

Caspian: Socar issues formal invitations for Tanap

 
Socar has formally invited a handful of IOCs to take part in the Trans-Anatolian Pipeline (Tanap), apparently shutting out others (both public and private) that had expressed an interest in joining the project. As previously expected, BP, Statoil and Total were all invited to take some of Socar's 80% stake in the project. (Turkey's state-owned energy companies hold the remaining 20%.) Socar has offered 29% of its stake, ensuring that it retains a majority.

The formal invitation on 8 October suggests that other potential entrants – notably Hungary's OMV and Ukraine – have been kept out of the project, at least for now. In late September Turkey's economy minister Zafer Çaglayan said that OMV “has demanded [an opportunity] to join the Tanap project.” Çaglayan suggested that the company was willing to provide an eye-opening €5.4 billion to Tanap. Although Turkish energy minister Taner Yildiz subsequently welcomed OMV's participation, Baku is the one to make the final decision and it shows no sign of wanting to dilute its stake any further.

Ukraine's President Viktor Yanukovych had affirmed his interest in Tanap as recently as last month, in a meeting with Turkish prime minister Recep Tayyip Erdogan on 14 September. Despite Yanukovych's request, he appears to have been rebuffed. At the time of writing, none of the three companies had responded to Socar's offer but BP, at any rate, is widely considered to be interested.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

© 2012 Menas Associates

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