US embassy cable - 03ANKARA1967

C O N F I D E N T I A L ANKARA 001967 
 
SIPDIS 
 
 
STATE FOR E, EB/CBED, EB/ESC, EUR/SE, NEA/NGA, OPS CENTER 
STATE PASS NSC FOR QUANRUD AND BRYZA 
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO 
USDOE FOR PUMPHREY/ROSSI 
 
 
E.O. 12958: DECL: 03/26/2013 
TAGS: ENRG, ECON, EPET, AJ, GG, ETTC, TU, IZ 
SUBJECT: IMPACT OF IRAQ OPERATION ON BTC PIPELINE, TPAO 
 
REF: ANKARA 400 
 
 
Classified by EconCouns Scot Marciel, Reason 1.5 (b,d) 
 
 
1. (C) BOTAS General Manager Gokhan Bildaci and BP's local 
BTC Co. President Yasar Latifov told us March 25-26 the Iraq 
Operation thus far had not had a serious impact on BTC; 
however, both said they were very concerned that the extra 
burden the war had placed on Turkey's infrastructure and 
construction companies could significantly delay BTC 
construction in Turkey.  For example, they said, the Turkish 
railway system was at full capacity transporting 
military-related equipment for both the U.S. and Turkish 
military.  As a result, the national railway company had been 
forced to delay delivery of the BTC pipe provided by the 
Turkish Pipe Consortium, which was produced in the Western 
town of Izmet and was to be transported by railway to the 
pipeline route.  Bildaci said it was not clear how long this 
delay would continue. 
 
 
2. (C) Bildaci and Latifov both said the Iraq Operation had 
thus far not affected the delivery of BTC pipe at Iskenderun 
port, as they had previously feared (reftel).  However, pipe 
storage at Iskenderun was nearly full, given delays by the 
railway company.  (Note:  Pipe from international sources is 
generally being delivered to Turkey at Iskenderun, and then 
transported to the pipeline route via rail.)  Bildaci said 
the major Turkish construction companies that he had 
sub-contracted had recently told him they may not be able to 
begin BTC construction work April 15 as planned due to 
"unspecified" work they may have to do for the Turkish 
military at that time. 
 
 
3. (C) Both Bildaci and Latifov said they were also concerned 
that "construction support" would be delayed because of the 
war.  For example, BOTAS and BTC Co had planned to build many 
construction support camps along the pipeline route. 
However, much of the equipment needed for these sites, such 
as portacabins, was the same equipment currently being used 
by the U.S. and Turkish militaries, which they expected would 
create shortages and delays. 
 
 
4. (C) The Turkish Petroleum Agency's (TPAO's) General 
Director for International Projects Orhan Duran told econoff 
March 26 that the Iraq Operation had thus far not had a 
significant impact on BTC, or on TPAO's other operations. 
Duran said as long as the Iraq Operation did not affect 
TPAO's domestic oil production -- which he did not expect 
would happen -- or cause oil prices to fall below USD 18-20 
per barrel, it likely would not affect TPAO's equities in 
Turkey or the region. 
PEARSON