Turkish Petroleum Corporation secures $1-billion loan for Shah Deniz

ISTANBUL - Reuters

Energy Minister Taner Yıldız (L) moves to shake hands with İşbank CEO Adnan Bali (R) and Vakıfbank CEO Halil Aydoğan (C) at yesterday’s ceremony. AA photo

The state-run Turkish Petroleum Corporation (TPAO) has inked a $1 billion loan agreement with Turkish state-run lender Vakıfbank and the country’s largest non-state lender İşbank so it can purchase Total’s stake in an Azeri gas project.

The TPAO in May signed a $1.5 billion agreement to acquire the Total’s 10 percent stake in Azerbaijan’s Shah Deniz gas project, which will lift TPAO’s stake in the project to 19 percent, while the French energy company exits the project.

Both banks will provide $500 million seven-year term loans according to the deal signed by the TPAO during a ceremony that was attended by the Energy Minister Taner Yıldız on Aug. 21.

The company will use its own equity for the remaining $450 million tranche.

The Shah Deniz field in the Caspian Sea, one of the world’s largest gas fields, feeds the South Caucasus Pipeline (also known as the Baku-Tiflis-Erzurum Pipeline) and the Trans-Anatolian gas pipeline (TANAP), which is planned to carry Azeri gas both to Turkey and to the European markets.

Speaking at the signature ceremony, Yıldız underlined that Turkey has become the second largest shareholder in the project after UK energy giant British Petroleum (BP), noting how the country has received a 50 year license over 468-kilometer square land.

Recalling how Turkey also raised its stakes in TANAP from 20 to 30 percent, the minister said the country had yielded $265 million profit from these projects last year and “is planning to double this amount in the upcoming year.”

“With a rise in the share, we are now a country that raised its capacity by 55,000 barrels per day (bpd) and owns 19 percent of the 120,000 bpd oil to be excerpted,” he said.

The minister noted the oil excepted from 1,100 wells in Turkey is almost equal to the oil produced with overseas operations, vowing to raise oil produced abroad by 450 percent when Iraq and northern Iraq are politically stabilized.