US embassy cable - 03ANKARA4912

C O N F I D E N T I A L ANKARA 004912 
 
SIPDIS 
 
 
STATE FOR PRM, E, EB, E/CBED, EUR/SE, NEA/NGA 
NSC FOR QUANRUD AND BRYZA 
 
 
E.O. 12958: DECL: 08/05/2013 
TAGS: ENRG, ETTC, PREL, TU, IZ 
SUBJECT: BOTAS ON IRAQI OIL AND GAZPROM 
 
Classified by EconCouns Scot Marciel, Reason 1.5 (b,d) 
 
 
1. (U) Baghdad minimize considered. 
 
 
2. (C) Summary.  BOTAS General Manager Mehmet Bilgic told us 
August 1 that a 10-person BOTAS technical team was in Iraq 
with Iraqi officials to inspect the Kirkuk-Yumurtalik 
pipeline and help get the oil flowing again as soon as 
possible.  Bilgic asked about the veracity of a recent news 
report that U.S. authorities in Iraq planned to export all 
oil through southern Iraq and close the Kirkuk-Yumurtalik 
pipeline.  Bilgic said BOTAS and Gazprom had agreed to resume 
the Blue Stream gas flow, but were still "discussing" 
outstanding issues in all of their bilateral gas contracts. 
End summary. 
 
 
BOTAS Team in Iraq 
------------------ 
 
 
3. (SBU) Bilgic told EconCouns and econoff August 1 that 
BOTAS had sent a 10-person technical team to Iraq on July 30 
to inspect the Kirkuk-Yumurtalik pipeline and help get 
operations started as soon as possible.  Bilgic said the team 
-- including 3 pump station engineers, 3 pipeline 
communication system experts, 2 firefighters, and 2 
assistants -- was working with Iraqi Oil Ministry officials. 
Bilgic said the team's preliminary report indicated that the 
pipeline was in better condition than expected, but they 
still had not seen the entire pipeline.  He noted that one of 
the problems was lack of communication along the pipeline. 
Bilgic said BOTAS wanted to get the oil flowing from Kirkuk 
as soon as possible, and had offered to help the Iraqis 
achieve this.  He said he hoped pipeline operations could 
resume in August, but would not know until his team returned 
from Iraq whether that was feasible. 
 
 
4. (SBU) Bilgic said he had seen a recent news article 
suggesting that U.S. authorities in Iraq planned on exporting 
all oil through southern Iraq, and no longer planned on using 
the Kirkuk-Yumurtalik pipeline.  EconCouns responded that 
there was no such plan, and that authorities in Baghdad were 
working hard to export oil from both the north and south. 
 
 
Relations with DEPA, Gazprom 
---------------------------- 
 
 
5. (C) Bilgic said he had had good meetings with DEPA in 
Greece in mid-July.  He said he reiterated BOTAS' interest in 
DEPA privatization, and continued the dialogue on the 
Greece-Turkey interconnect. 
 
 
6. (C) Referring to BOTAS' recent dispute with Gazprom over 
the price formula in the Blue Stream contract, Bilgic said 
the two companies had decided to resume the Blue Stream gas 
flow as of August 1.  He said the companies still had 
"disagreements" regarding all of their gas contracts (Blue 
Stream, Russia West 1 and Russia West 2), including issues 
regarding price, "take-or-pay" provisions, and duration of 
the contracts.  Indicating that BOTAS paid a higher price for 
gas than Gazprom's other clients, Bilgic said it was his hope 
that BOTAS and Gazprom could reach an accommodation that 
would allow all parties to continue implementing the 
contracts. 
DEUTSCH