Turkey's privatization agency has completed accepting applications from applicants for participation in the tender for the sale of 66% of the country's largest petrochemical holding Tupras. The Turkish authorities are hiding the names of the competition participants, having taken a non-disclosure obligation from each of them. According to Kommersant's information, a number of Russian companies will take part in the auction, including Tatneft, the only supplier of Russian oil to Turkey. To purchase Tupras, the Tatarstan company entered into an alliance with a Turkish partner, whose name is also kept secret. Kommersant Tupras (Turkiye Petrol Rafinerileri Anonim Sirketi), which provides about 85% of all oil refining in Turkey, unites 4 refineries with a total capacity of more than 27 million tons of oil per year, as well as one petrochemical complex. In 2002, Tupras produced 21.6 million tons of petroleum products, the turnover amounted to $10.7 billion. This year the company expects to increase volumes to 24 million tons and sales to $11 billion (of which $800 million is due to the export of petroleum products). In 2002, the state began the privatization of Tupras, selling 31% for $3.9 billion. The current tender, which is scheduled to be held before December, is up for 65.67% of the company's state stake. The privatization of Tupras and tobacco holding Tekel is the core of Turkey's IMF-pushed privatization plan for this year.

After registration of participants in the competition was completed, Turkish Finance Minister Kemal Unakitan, in an official statement to the Turkish media, announced the government’s decision not to disclose the names of applicants until the winner was announced. Mr. Unakitan explained the choice of a closed form of competition with the desire “not to repeat mistakes and not give rise to a scandal,” which has already been noted in Turkish privatization. Moreover, the organizers of the competition made potential participants of the competition undertake not to disclose any information about its conditions and their participation in the auction.
According to business media and news agencies, 10 companies have already expressed interest in privatizing Tupras, including Turkey's two largest private oil companies Sabanci and Koc, as well as marketing company POAS, which controls a third of the Turkish oil market. Russian companies will also be a prominent group. According to unofficial sources of Kommersant, Yukos-Sibneft will take part in the competition along with the Turkish company Oyak, controlled by the pension fund of the Turkish Armed Forces, as well as TNK and Tatneft, the only supplier of Russian oil to Turkish factories.
Tatneft General Director Shafagat Takhautdinov was the first to express interest in the Turkish holding. This happened in the spring, when Tatneft was summing up the first results of cooperation with Tupras, which began last summer. Then the companies signed an agreement to supply 2.4 million tons of oil to Turkey (about a tenth of annual production). It is noteworthy that in March, just before the start of the American invasion of Iraq, Tupras, which traditionally purchases raw materials in Saudi Arabia, Iran, Syria and Libya, received from Tatneft 600 thousand tons not of Russian Urals oil, but of Iraqi Kirkuk, received by oil workers in within the framework of the UN Oil for Food program. In addition, direct export operations for the sale of Tupras of various types of rubbers were carried out by Nizhnekamskneftekhim.
Such a flexible partnership suited both parties: in May, Tupras General Director Husamettin Danish and Chairman of the Board of Directors Kahraman Emmioglu, who visited Kazan, held negotiations with Mr. Takhautdinov and the Prime Minister of Tatarstan, Chairman of the Board of Directors of Tatneft, Rustam Minnikhanov. During the meeting, the parties agreed in principle that in 2004 Tatneft would increase the volume of oil supplies to Tupras by at least 1 million tons. Naturally, the privatization of the holding was not discussed. But then representatives of Tatarstan refused to say whether Tatneft would take part in the competition. A month ago, Mr. Minnikhanov said that “the conditions of the tender are being studied.”
As a result, according to Kommersant’s information, the Tatarstan company nevertheless submitted an application to participate in the competition. Like YUKOS, Tatneft will enter the auction in an alliance with a Turkish partner. However, Kommersant’s sources flatly refused to name him.
Kommersant will monitor developments.
LUISA IGNATIEVA, SHAMIL IDIATULLIN

Contacts between Tatarstan and Turkey developed rapidly in the early 90s: this was helped by the proximity of languages, faith and Tatar oil. Relations deteriorated sharply after the largest Turkish company, Degere Enterprises, which acted as a partner of Tatarstan, refused to pay $23 million for the supplied oil. Kazan failed to extract money with the help of Turkish ships, nor to collect the port on the Sea of Marmara built by Degere for debts. Because of this, by the end of the 90s, economic relations between the two republics headed towards zero. Only Turkish builders managed to regain the favor of the Tatarstan authorities. They built a number of strategic objects for Kazan, including the main mosque of the republic, Kul Sharif. After this, the local market became open and accessible to the Turks, and traders readily took over the baton of builders. This year, the Ramenka company opened the first Ramstore hypermarket in Kazan, and the Turkish Ambassador to Russia Kurtulush Tashkent said that as part of the reconstruction of the historical center of Kazan for the 1000th anniversary of the city (celebrated in 2005), Tatarstan is ready to annually offer Turkey construction contracts for $30-40 million. In response, Turkey promised “to make large investments in the trade sector in the coming years” and again became the largest consumer of Tatar oil. In April, Tatarstan President Mintimer Shaimiev, after a meeting with Ambassador Tashkent, said that this year the trade turnover of the two republics will increase from $90 million to $500 million, and in the future should reach $1 billion.

Kommersant (Kazan) No. 198 dated 10.29.2003, p. 12

Themes:

Activities of Tatneft

Tatneft is preparing to occupy Turkey