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October 21, 2021

Turkey considers restructuring of state energy giants

Turkey is reportedly looking to restructure some of its major state-owned energy companies prior to possible public offerings or stake sales.

By Archana Rani

State-owned Botas could be split into three entities, including gas trade, crude pipeline, and gas infrastructure.

Turkey is reportedly looking to restructure some of its major state-owned energy companies prior to possible public offerings or stake sales.

People familiar with the development were cited by Bloomberg as saying that Turkey’s President Recep Tayyip Erdogan is keen on reorganising energy companies, which includes Botas.

Botas, a state-owned gas importer and pipeline operator, is expected to be split into three smaller entities, according to a bill seen by the publication.

The three units will include gas trade, crude pipeline, and gas infrastructure operations.

These units would be launched as separate corporations in compliance with legislation to liberalise the country’s gas market.

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Moreover, the Treasury would take over the possible negative difference between assets and liabilities of Botas, as debt. This debt will be repaid via dividends of the three new entities, according to the bill.

The separated entities, once they turn profitable, could be considered for a public offering or privatisation.

The proposed restructure comes as the government seeks to replace state-controlled enterprises with a profit-driven corporate approach.

In Turkey, state oil producer Turkish Petroleum Corporation (TPAO) is currently developing a large gas field in the Black Sea.

In a related move, the Turkish Government is also planning an initial public offering for state electricity transmission company Teias by the end of next year.

Recently, Reuters reported that Turkey agreed to import natural gas from Azerbaijan to meet the surging gas demand.

Under the agreement, Azerbaijan will supply 11 billion cubic metres (bcm) of natural gas to Turkey over a period of three years, according to Turkish Energy Minister Fatih Donmez.

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