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Bud Fackrell

TURKEY - Energy & Mining

Getting Down

President, BP Turkey


Bud Fackrell has a BS in Petroleum Engineering from the University of Wyoming, and has 37 years of experience in the oil and gas industry, mainly overseas in executive roles in upstream and midstream areas. He was appointed President of BP Turkey in April 2012.

What are the benefits of operating across all sections of Turkey’s energy industry? BP has been in Turkey for 100 years, contributing to Turkey’s economy, employment, and energy sector with […]

What are the benefits of operating across all sections of Turkey’s energy industry?

BP has been in Turkey for 100 years, contributing to Turkey’s economy, employment, and energy sector with billions of dollars of investment. This makes it one of Turkey’s oldest and largest foreign investors. Having an integrated business, from upstream and midstream to downstream, puts us in an excellent position for future growth and continuing investment. Turkey is the main export route for oil and gas from Azerbaijan, which puts the country into a key position geopolitically. BP is proud to be the largest investor and operating shareholder in these important projects. We are committed to Turkey, and our investments will continue to grow in the future.

What is BP Turkey’s growth strategy for the country?

On the upstream side, we plan to make significant investments in the future on our Shah Deniz field in Azerbaijan. We recently announced that Shah Deniz II has entered into the Front End Engineering and Design (FEED) stage. The entry into FEED represents the start of a key phase in the project during which engineering studies will be refined, further wells will be drilled, commercial agreements will be finalized, and key construction contracts will commence. What this means for our business in Turkey is that we will make key decisions on how to transport the gas through Turkey onto customers in Europe. On the downstream side, our fuels business in Turkey is growing and expanding into more cities. We expect to open another 30 to 35 stations this year. Our lubricants business is growing as well, and solidifying its market share with new products and strategies.

A significant challenge in Turkey’s downstream sector is the illegal usage of base oils as motor fuels. What steps is BP taking to address this, and how is the government monitoring the situation?

Firstly, we would like to thank the Ministry of Energy and Natural Resources as well as the Ministry of Finance and other relevant government institutions for the tax amendment by the Ministry of Finance in 2011, which was an important step in solving the Base Oil 10 issue. In addition to this important step already taken by the government, we feel that this needs to be accompanied by regular inspections and tax audits for a complete solution of the problem. Alternatively, the government can issue refunds on the special consumption tax, rather than the current tax deferral and exemption method. BP has prepared a report on the Base Oil 10 problem, with the objective to assess the current situation, and put forth recommendations for solutions. In this report, we have worked with PetDer, TÜBİTAK, the Middle East Technical University (ODTÜ), and Istanbul Technical University (İTÜ). The report also includes data from studies conducted by BP’s Global Fuels Technology Center in Bochum, Germany. These valuable institutions have provided us with laboratory testing and research data. We have shared this report with the government as well as the public.

Turkey is a minor producer and a transit country. What is your vision for Turkey emerging as the region’s energy hub?

Turkey is a key country for the transportation of gas and oil from producing countries in the East to the markets in the West. The first example of Turkey becoming an “energy corridor” is the Baku-Tbilisi-Ceyhan (BTC) pipeline, where BP is the largest shareholder as well as the operator. This is the primary export route for Azerbaijan’s oil from the Azeri-Chirag-Guneshli (ACG) field as well as condensate from the Shah Deniz gas field.

The Ceyhan area has been declared an Energy Specialization Area by the government, which means that the government will provide incentives for companies that wish to take part in energy investments, such as a refining, for example, in this area. Strategies like these will allow Turkey to reap the benefits of being an energy corridor. We see pipeline investments continuing, as gas from the Shah Deniz field, now in its second phase of development, will transit through Turkey to supply European markets.

To what extent does BP invest in supply and logistics in Turkey?

BP has continuing investments in this area, including fuel terminals throughout the country, as well as a very modern and safe road transport operation. On the natural gas side, Turkey needs further investment in areas such as gas storage. I think that this is clearly an area that foreign investors would be interested in.

What portion of BP’s Turkish activities can be attributed to downstream?

BP has had a large-scale downstream business in Turkey for many decades. We are celebrating the 100th year of our operations in Turkey in 2012. Our fuels business supplies advanced fuels to over 620 stations throughout the country. Our lubricants business, including the Castrol brand, is number one in market share in the automotive segment, and number two overall. The Gemlik lubricants plant is an important investment for us. Products from this plant are exported to other countries as well. Turkey is a regional headquarters for Air BP, which supplies aircraft at four major airports in the country, and many more in the region. Our Auto LPG business is healthy and outpacing market growth. We are committed to growth in the downstream, and our significant investments will continue. One of the things I am most proud of is our sponsorship of the Turkish National Olympic and National Paralympic teams, as part of our 100th year in Turkey. We are supporting Turkish athletes as they strive for success at the London 2012 Olympic Games and beyond.

How integral is the long-awaited Nabucco project and the BTC pipeline to BP’s operations in Turkey?

The BTC pipeline is currently BP’s largest investment in Turkey, and is also strategically important for BP at a global level. We have transported over 1.5 billion barrels of oil since the BTC pipeline started operations in 2006. It is the main export route for Azerbaijani oil.

Modern techniques designed to unlock tightly held hydrocarbons, such as horizontal drilling and multi-stage fracturing, have yet to be employed in Turkey. Do E&P activities feature in BP Turkey’s plans?

In Turkey, we explored the Eastern Black Sea in 2005-2006, as a partner of TPAO, the national oil and gas company. Since then, we have not had any active plans for exploration in Turkey.

However, we continuously evaluate opportunities worldwide, and if there is an area of interest, we would be pleased to partner with TPAO once again on further exploration.

What is your outlook for Turkey’s energy industry in the medium term?

As a growing country, Turkey needs continuing investment in the energy industry overall. This includes areas such as power generation, LNG, gas storage, and exploration. It is a very dynamic sector, and we expect it will continue to grow, to be able to fuel the needs of a large and growing economy. As one of Turkey’s first foreign investors, and one of the largest, we are very pleased to see the continuing growth of the economy. We have been here for 100 years, and are committed to further investment in Turkey’s economy and energy sector.



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