Turkey's Central Bank keeps policy rate unchanged

By Muhammed Ali Gurtas

ANKARA (AA) – The Turkish Central Bank (CBRT) on Wednesday kept its one-week repo rate — also known as the policy rate — constant at 24 percent.

The decision came in a statement from the bank's Monetary Policy Committee (MPC) meeting, which is the first of eight meetings scheduled for the year.

Among 19 economists surveyed by Anadolu Agency on Monday, only one economist expected a 150-base-point decline, i.e. 1.50 percentage points, in one-week repo rate, while all the others foresaw no change in interest rates.

In 2018, the CBRT held nine MPC meetings, as interest rates climbed from 8 percent to 24 percent over the course of the year.

Turkey: Economists expect no change in interest rates

By Erhan Cihan Unal

ISTANBUL (AA) – The Turkish Central Bank is expected to keep interest rates constant this week, according to an Anadolu Agency survey on Monday.

On Wednesday, the bank will hold its first Monetary Policy Committee (MPC) meeting this year to announce its decision about interest rates.

Last month, the bank kept its one-week repo rate — also known as the bank's policy rate — constant at 24 percent.

Among 19 economists surveyed by Anadolu Agency, only one economist expects a 150-base-point decline, i.e. 1.50 percentage points, in one-week repo rate, while all the others foresee no change in interest rates.

According to its schedule, the bank will hold eight MPC meetings this year.

In 2018, the bank held nine MPC meetings, as interest rates climbed from 8 percent to 24 percent over the course of the year.

  • With writing and contributions by Muhammed Ali Gurtas from Ankara

Brent falls below $60 mark at week beginning Jan. 14

By Gulsen Cagatay

ANKARA (AA) – International benchmark Brent crude traded at $59.80 per barrel at 06.46 GMT on Monday while the price of American benchmark West Texas Intermediate (WTI) saw $51.02 per barrel at the same time.

Brent oil ended the week at $61.84 per barrel at 11.57 GMT on Friday while WTI registered at $52.87 a barrel.

Brent oil prices dropped below $60 per barrel on Monday after Chinese data showed weakening imports and exports.

According to the official data, China’s December exports fell by 4.4 percent from a year earlier, the biggest monthly drop in two years.

The oil rig count in the U.S. showed a decline this week, according to data released by oilfield services company Baker Hughes on Friday.

The number of oil rigs in the country decreased by four for the week ending Jan.11, bringing the total count to 873 from 887 the week before, the data revealed.

Despite the decrease in the oil rig count, crude oil prices showed losses of around 1.9 percent in the global market on Friday. Brent crude closed at $60.48 per barrel while WTI finished the day at $51.59 a barrel.

Brent oil over $61 per barrel at week ending Jan. 11

             By Gulsen Cagatay 

ANKARA (AA) – International benchmark Brent crude traded at $61.84 per barrel at 11.57 GMT on Friday while the price of American benchmark West Texas Intermediate (WTI) was $52.87 per barrel at the same time.

Brent oil started the week at $57.84 per barrel at 06.45 GMT on Monday while WTI registered at $48.73 a barrel.

Crude oil prices started the new week with gains on positive expectations from the negotiations between the U.S. and China on Monday to resolve trade disputes.

Nonetheless on Monday, American investment banking and financial services firm Goldman Sachs lowered its oil price forecast for 2019 citing rising oil output, high inventory and low global demand.

The firm said in a note that it expects international benchmark Brent crude to average $62.50 per barrel this year, down from its prior estimate of $70 a barrel. WTI is forecast to average $55.50 a barrel in 2019, down from the previous expectation of $64.50 per barrel.

On Tuesday, crude oil prices were slightly down at the start of trading, despite reports that Saudi Arabia cut its crude exports to help boost prices. Brent oil traded at $57.28 per barrel at 0620 GMT for a daily loss of 0.5 percent while WTI was at $48.55 a barrel at the same time showing a 0.4 percent loss.

At the start of trading on Wednesday, crude oil prices were up around 1 percent through OPEC curbing oil production and with the ongoing trade talks between the U.S. and China generating investor optimism.

OPEC and its allies agreed on Dec. 7 to curb their total crude oil production by 1.2 million barrels per day from Jan. 1 for six months. The agreement aims to trim some of the supply glut in the global oil market and drive prices higher.

At trading start on Thursday, oil prices were down around 1 percent as U.S. crude production endured at a record high level to keep a downward pressure on prices.

Brent crude traded at $60.77 per barrel at 0745 GMT on Thursday with a 1.1 percent decline, after it ended Wednesday at $61.44 a barrel. WTI was recorded as $51.75 a barrel at the same time marking a 0.8 percent loss, after closing the previous session at $52.17 per barrel.

UPDATE – Turkey's exports hit all-time high with $168.1B in 2018

UPDATES WITH MORE MORE REMARKS BY TRADE MINISTER

By Muhammed Ali Gurtas

ANKARA (AA) – Turkey's exports hit an all-time high with $168.1 billion last year, the country's trade minister said on Friday.

Ruhsar Pekcan stated that exports in 2018 climbed 7.1 percent year-on-year, compared with nearly $157 billion in the previous year.

"In 2018, imports fell by 4.6 percent on a yearly basis to $223.1 billion," Pekcan said.

"Turkey's exports-to-imports coverage ratio reached 75.3 percent last year, up 8.2 percentage points from 2017," she added.

According to the preliminary data, Turkey's foreign trade balance posted a deficit of $55 billion last year, marking a significant improvement compared with $76.8 billion in 2017.

The final figures will be announced by the country's statistical authority on Jan. 31.

Trade minister stated that the increase in exports-to-imports coverage ratio would continue in 2019.

"Turkey maintains its strength in the export markets, as the whole world struggles with the uncertainties of global trade wars," said Pekcan.

"We not only enhance our potential in foreign trade, but also manage to access many parts of the world at the same time.

"Last year, Turkish exporters reached 242 markets around the world," she said.

Pekcan remarked that exports to Africa, which was identified as target market, surged 24 percent while exports to Latin America jumped 35.6 percent in 2018.

"Our long term goal is to restore a balanced structure in Turkey's foreign trade relations and thus gradually decrease our country's external finance need," she added.

Turkey's exports hit all-time high with $168.1B in 2018

                By Muhammed Ali Gurtas  </p>    <p>ANKARA (AA) - Turkey's exports hit an all-time high with $168.1 billion last year, the country's trade minister said Friday.</p>    <p>Ruhsar Pekcan stated that exports in 2018 climbed 7.1 percent year-on-year, compared with nearly $157 billion in the previous year. </p>    <p>&quot;In 2018, imports fell 4.6 percent on a yearly basis to $223.1 billion,&quot; Pekcan said. </p>    <p>&quot;Turkey's exports-to-imports coverage ratio reached 75.3 percent last year, up 8.2 percentage points from 2017,&quot; she added.</p>    <p>According to the preliminary data, Turkey's foreign trade balance posted a deficit of $55 billion last year, marking a significant improvement compared with $76.8 billion in 2017.</p>    <p>The final figures will be announced by the country's statistical authority on Jan. 31.

Turkey lowers limit for power users to switch suppliers

             By Gulsen Cagatay<br>

ANKARA (AA) – Turkey's Energy Market Regulatory Authority (EMRA) decreased the usage limit for electricity customers to become eligible to switch suppliers from 2,000 kilowatt-hours to 1,600 kilowatt-hours, EMRA said Friday.

From 2019, customers who use more than 1,600 kilowatt-hours of electricity per year will qualify as eligible customers who have the right to move to a power supplier of their choice, EPDK said in a statement.

With the new limit, 19 million more electricity customers are set to become eligible in 2019.

– Latest limit qualifier equals monthly bill of 67 Turkish liras ($12.74)

In accordance with the latest decision, a customer with a monthly power bill of approximately 67 Turkish liras will be classified as an eligible consumer next year.

As part of Turkey's comprehensive program to liberalize and privatize the electricity market in 2001, the country's distribution network was divided into 21 distribution regions in 2013 and has started to lower customers' eligibility limits since 2003.

In 2003, EMRA started a consumer scheme to offer individual customers and legal and corporate entities, which consume more than 9 million kilowatt-hours of electricity a year, the opportunity to choose their preferred electricity supplier.

EMRA has adjusted the limit in recent years to allow more people to qualify.

The biggest adjustment came in a meeting in January 2013, when the limit was lowered from 25,000 kilowatt-hours in 2012 to 5,000 kilowatt-hours in 2013.

Since then, further modifications have been made. The limit was set as 4,500 kilowatt-hours in 2015, 3,600 kilowatt-hours in 2016, 2,400 kilowatt-hours in 2017 and 2,000 kilowatt-hours in 2018.

Highlights of Turkish energy market in 2018

                                               By Gulsen Cagatay 

ANKARA (AA) – The developments in the Trans Anatolian Natural Gas Pipeline (TANAP) project, TurkStream Natural Gas Pipeline project, the opening of new Turkey's biggest oil refinery, STAR, marked the top news stories in Turkey's energy sector in 2018.

The 1,850-kilometer-long TANAP is the largest section of the 3,500 kilometer-long Southern Gas Corridor that was officially inaugurated during a ceremony held in Baku on May 29 with the participation of Azerbaijan President Ilham Aliyev.

TANAP, with around $8 billion of investment, will deliver 6 billion cubic meters from the giant Shah Deniz II field in Azerbaijan to Turkey and 10 billion to Europe per year. The European part of the project is expected to become operational in 2020, upon the completion of the Trans Adriatic Pipeline (TAP), which will connect with TANAP at the Turkish-Greek border.

Turkish President Recep Tayyip Erdogan inaugurated the TANAP project on June 12 in the northwestern city of Eskisehir, where the project's compressor station is located.

Currently, the Southern Gas Corridor Company holds a 51 percent share in the pipeline, Turkey's BOTAS has a 30 percent interest, BP holds a 12 percent share and Azerbaijani oil company SOCAR Turkey has the remaining 7 percent stake.

– Turkey's STAR refinery

On Friday, Oct. 19, Turkey's biggest oil refinery, STAR, officially opened in the western coastal province of Izmir with the attendance of Erdogan and his Azerbaijani counterpart, Aliyev as well as other top officials from both countries.

STAR is SOCAR Turkey's biggest investment in the country at a cost of $6.3 billion.

The refinery, which has a crude oil processing capacity of 10 million tons, started its operations back on Aug. 3 with the arrival of the refinery's first crude oil cargo ship Absheron, loaded with 80,000 tons of feedstock.

In 2018, refining of around 2 million tons of crude oil is expected at the refinery, which will increase to 10 million tons at full capacity.

According to the official website of Turkey's leading petrochemical company, PETKIM, the STAR Refinery will meet more than 25 percent of Turkey's processed oil products needs upon start-up.

<p>- TurkStream offshore section completed</p>  <p>Alexander Medvedev, deputy chairman of Russia's gas giant Gazprom and the TurkStream project constructor, said in 2018 the company would almost double its investments in the TurkStream gas pipeline project compared to 2017 when 92.8 billion rubles was spent.</p>  <p>On Jan. 15, Gazprom announced the company's plans to invest 182.4 billion rubles ($3.2 billion) in 2018 for the pipeline project to send Russian gas to Europe via Turkey.</p>  <p>On Jan. 29, more than half of the first line of the TurkStream natural gas pipeline project to deliver 35 percent of Turkey's gas needs had been completed, Gazprom officials said while on-site at Novy Urengoy, Russia's biggest gas field and the world's second-biggest field located in northern Russia.</p>  <p>On Aug. 8, Gazprom laid down 1,500 kilometers of the pipeline's length across two lines, corresponding to about 80 percent of the total length of the pipeline, Gazprom CEO Alexei Miller confirmed.</p>  <p>Also in August, the world's largest construction and heavy-lift vessel, Pioneering Spirit, which is currently laying the second line of the TurkStream project, set a new world record in offshore pipelaying on Aug. 26, Gazprom confirmed.</p>  <p>Gazprom said on its official Instagram account that the vessel, which belongs to the Allseas company, laid 6.27 kilometers of pipes per day on Aug. 26, surpassing the average of four kilometers per day.</p>  <p>The project has a total capacity of 31.5 billion cubic meters. The first part of the project with a capacity of 15.75 billion cubic meters will transfer gas to Turkey from Russia.</p>  <p>The first line of the TurkStream reached the Turkish shore off Kiyikoy in northwest Turkey on April 29 and the launch of the second line is expected in 2019.</p>  <p> On Nov. 19, Erdogan announced during a ceremony in Istanbul marking the completion of TurkStream’s offshore section that the project would be ready to operate in 2019 after tests are carried out.</p>  <p>Erdogan confirmed that since 1987 Turkey purchased 387 billion cubic meters (bcm) of natural gas from Russia while hailing this achievement as a success for both countries in the energy field. He added that Turkey's goal is to reach an annual trade volume of $100 billion with Russia.

– Akkuyu Nuclear Power Plant

On Dec. 14 this year, the Turkish Atomic Energy Authority (TAEK) granted the country's first nuclear power plant, Akkuyu Nuclear Power Plant's (NPP) project company, Akkuyu Nuclear, a "limited works permit" for the construction of the plant's second unit, Rosatom, Russia's state nuclear corporation company and major consortium partner for the plant, announced.

Receiving the "limited works permit" is an important stage in the licensing of Akkuyu NPP second unit's construction, Rosatom's statement read.

On Sept. 10, Rosatom announced that a new construction contracting company joined the partners for the construction of the plant. According to the company's statement, the new participant company, Titan-2 Concern, is to act as a contractor for the Atomstroyexport (ASE) company – an engineering division of Rosatom.

"Cooperation with Titan-2 Concern for the Akkuyu NPP is the next step in the company's strategy to have reliable partners for the construction and assembly at all construction facilities of ASE's engineering division," Valery Limarenko, head of ASE Company and the Engineering Division of Rosatom State Corporation said.

The NPP was also granted an electricity generation license for a period of 49 years from the Turkish Energy Market Regulatory Authority on June 15.

Erdogan stated in early December 2018 that the construction of Turkey's first nuclear plant was on schedule and that the second would be built in Sinop in the Black Sea province, while a third nuclear plant was planned for construction in the northwestern Thrace region.

– Seismic vessels

Turkey purchased a second drilling vessel to explore domestic oil and gas reserves in order to become more energy independent.

<p>On June 7, Turkey's first drilling vessel, Fatih, arrived near the city of Antalya on late Wednesday, June 6 in order to start the country's first deep drilling project in the Mediterranean.</p>  <p>Turkish former Energy and Natural Resources Minister Berat Albayrak said on May 31 at an official sailing ceremony in the Kocaeli province that the vessel would conduct drilling at a depth of 2,600 meters in the Mediterranean, and hailed it as a historical step for Turkey. </p>  <p>On Dec. 8, the new Energy Minister Fatih Donmez announced a second drilling vessel that was purchased by Turkey was expected to arrive in the Mediterranean waters by the end of January 2019. </p>  <p>The minister confirmed that Turkey's two seismic vessels, Barbaros Hayrettin Pasa and MTA Oruc Reis, were continuing seismic surveys in the Black Sea, and the Mediterranean, respectively.</p>  <p>Barbaros Hayrettin Pasa, Turkey's first seismic vessel, was bought from Norway in 2013, and has been conducting surveys in the Mediterranean since April 2017. </p>  <p>MTA Oruc Reis was built by Turkish engineers in a local shipyard in Istanbul and has been in operation since late June 2017.</p>  <p>Donmez announced that Turkey started its first deep-sea drilling offshore Antalya on the Mediterranean coast on Oct. 30, while drilling in offshore Mersin started on Nov. 26.

– Salt Lake gas storage

On June 27, the World Bank and China-led Asian Infrastructure Investment Bank (AIIB) approved a total of $1.2 billion credit for Turkey's Tuz Golu (Salt Lake) underground gas storage facility.

Former Energy Minister Albayrak said Turkey would gradually increase the storage capacity to reach 5.4 billion cubic meters before 2023. He added that 10 billion cubic meters of storage capacity would be reached with the expansion of the Silivri natural gas storage facility located west of Istanbul.

Turkey's Salt Lake gas storage facility located in the Sultanhani district in the province of Aksaray, 40 kilometers from the Salt Lake, was officially opened on Feb. 10 in 2017. Its storage capacity is set to increase from 1 billion cubic meters to as much as 5 billion cubic meters per year.

The facility at full capacity will have 60 caverns by 2023. The launch of the second phase of the project will open an additional 48 caverns.

– Floating liquefied natural gas unit

On Feb. 8, Turkey began operations of its second floating liquefied natural gas unit (FSRU) with 20 million cubic meters of send-out capacity per day.

The FSRU docked at a port in Dortyol, Hatay – a province in the Mediterranean region. The country aims to reduce dependency on pipeline gas through FSRUs, and therefore, these units are docked at ports close to regions with higher gas consumption.

Turkey's first FSRU was launched in Aliaga, Izmir in December 2016 at a time when the country needed extra gas capacity to meet the increased consumption due to the very cold weather conditions at that time.

US oil majors raise oil production outlook for 2019

             By Ovunc Kutlu

ANKARA (AA) – Two U.S. major oil companies, ConocoPhillips and Hess Corporation, increased their oil production outlook for next year from 2018, despite keeping their capital expenditure budget unchanged year-over-year, according to data compiled by Anadolu Agency on Wednesday.

ConocoPhillips, the world's largest independent exploration and production company based on production and proved reserves, said Monday in a statement that it expects to produce 1.3 to 1.35 million barrels of oil equivalent per day (boed) in 2019.

The company said in July its full-year production guidance for 2018 was between 1.22 and 1.25 million boed, or between 6.5 percent and 8 percent lower than its production outlook for 2019.

The company's oil production outlook excludes output from Libya.

The firm kept its capital expenditure budget unchanged at around $6.1 billion, compared to last year, and said it would have a cash flow provide the price of American benchmark West Texas Intermediate (WTI) stays above $40 per barrel.

Chairman and CEO Ryan Lance said in a statement that the firm is keeping its focus on "early-stage investments in attractive opportunities that can add low cost of supply inventory and drive sustained future returns."

Another major American energy company Hess Corporation said Monday its oil production for 2019 is estimated to average between 270,000 and 280,000 boed.

The firm's oil production was approximately 245,000 boed in 2018, excluding Libya.

The company's capital and exploratory budget was also kept unchanged at $2.9 billion from last year.

Hess CEO John Hess said in a statement that the company would focus spending on its high return investment opportunities, and reduce its costs to improve profitability.

In addition ConocoPhillips and Hess Corporation, the U.S.' second biggest energy firm Chevron said last week it would increase its budget for the first time in four years.

The company said on Dec. 6 in a statement that it increased its capital and exploratory spending program for 2019 to $20 billion.

"Our investments are anchored in high-return short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years," Chairman and CEO Michael K. Wirth said in the statement.

The firm announced in December 2017 that it had a capital and exploratory spending program of $18.3 billion for 2018.

While Chevron had a capital budget of $19.8 billion for 2017, the last time the company's budget stretched to over $20 billion was in 2015 with $35 billion, according to its statements.