SOCAR reportedly in talks with Demirören for Total

Committed to increasing investments in the Turkish energy market, the State Oil Company of the Azerbaijani Republic (SOCAR), Turkey's largest private sector investor, has embarked on gas distribution and retail after its refinery, natural gas and petrochemical investments. To this end, it has been holding "strategic cooperation" talks with Total, owned by the Demirören Group. Sources speaking to Habertürk newspaper said that the acquisition of a portion of the shares is also on the agenda.

The company, which started production at the SOCAR Turkey Aegean Refinery (STAR) in the Aegean province of İzmir, launched in October 2018, will thus be in all value chains with an integrated structure that extends from production to consumption, directly reaching customers through canopy sales. SOCAR, which has raised the bar in the fuel sector, has been holding cooperation talks concerning fuel oil distribution and dealership network with Demirören Group's Total. The acquisition of a portion of the shares may be one of these alternatives, they added. SOCAR recently acquired Bursa and Kayseri natural gas distribution companies from the German EWE. Permission and approval processes for the transfer of these companies are continuing. SOCAR Turkey was previously reported to be preparing to make another major investment in Turkey that would decrease the country's current account deficit by up to $5-6 billion annually. The Azerbaijani energy giant has been operating in Turkey for more than 10 years, and it plans to establish a new petrochemical complex. The Azerbaijani giant has so far realized $14.2 billion of its planned $19.5 billion investments in Turkey to be made by 2020. The investment cost of the SOCAR-BP joint project is an estimated $1.8 billion, and the complex is expected to start operations in 2023.

On Oct. 19, 2018, Turkey and Azerbaijan inaugurated the largest single-location real sector investment in Turkey – STAR – in İzmir's Aliağa district. The grand opening ceremony was held with President Recep Tayyip Erdoğan and his Azeri counterpart İlham Aliyev in attendance. SOCAR recently acquired EWE Turkey Holding, which has been running the Turkey operations of the German energy company EWE AG and its affiliates. The company said it has been transmitting natural gas in Turkey in partnership with the Trans-Anatolian Natural Gas Pipeline (TANAP), adding that it has acquired EWE Turkey Holding and its subsidiaries – Bursagaz, Kayserigaz, Enervis, EWE Enerji and Milenicom.

Inaugurated on June 12, TANAP is the largest leg of the Southern Gas Corridor (SGC), a multinational European Commission project to transfer gas from Azerbaijan's Shah Deniz Gas Field in the Caspian Sea to European markets to reduce the continent's dependency on Russian gas. SOCAR entered the Turkish energy market in 2008 when it acquired the state-run petrochemical company PETKİM for $2.4 billion.