Page 14 - DMEA Week 12 2023

DMEA NEWS IN BRIEF DMEA

be introduced for non-compliance with the
Russia sanctions -in the run-up to the polls
and the potential for economic pain and lost
votes that they would bring.
Such a calculation by Erdogan might
also be seen in how at the end of last week
he removed Nato member Turkey’s veto on
Finland joining the military alliance, while
keeping the block on Sweden’s application for
membership. Such a compromise might be
enough to keep US critics content until after
the Turkish elections, while not exposing
As crude oil export dropped as a result of the Falade recalls the vigorous work of Erdogan to domestic claims that he entirely
outage of the Trans Niger Pipeline, NDEP lowering the pour point of the High Pour Fuel bowed to Western pressure on the matter.
proceeded to debottleneck the refinery Oil, one of the refinery’s top revenue earners. Turkey’s move against Russian airline-
production from upstream oil production, “At atmospheric pressure, the product was operated Boeings means that the carriers can
pumping in more crude into its 11,000Barrel congealing, such that offtake was complicated”, still fly to and through Turkey, but they will
Per Stream Day refinery complex. “Capacity he explains. He is happy to conclude that the have to deploy other aircraft such as Airbus
utilisation improved to 24.0% from 13.45% in resolution of every one of these complications jets.
2021; underscoring further upside potential as has aided the improvement of the refining However, as The Wall Street Journal (WSJ)
well as additional opportunities that exist to ecosystem. “There’s a curve we are passing reported in late January, US authorities
further optimise the refinery business”, Falade which anyone who comes after us would not want Turkey to stop receiving both Boeing
says in an update. need to navigate”. and Airbus flights from Russian carriers, on
But there are back end stories to these AOG the basis that Airbus planes contain many
figures. American parts. Wrecking most flight links
One is about naphtha, a product which between Russia and Turkey would be a big
wasn’t sold on its own. Until 2022, it had FUELS win for the West, given that since Russia
always been spiked into the crude stream and became a pariah to the West following its
exported. But the nine-month long outage of Turkey bans airports from invasion of Ukraine 13 months ago Turkey
the TransNiger Pipeline in 2022 meant that -which has imposed no sanctions on Russia
there was no market for the naphtha as it is refuelling Russian-operated -has become an important bolthole for
not in demand in Nigeria. “We had to work Russian investors, while its mega airport
with regulators and standards agencies, for the planes in Istanbul offers Russians connections to
licencing for storage and export of Naphtha, destinations the world over. Also, Turkey has
satisfying very stringent requirements”, Falade Turkish airports have been banned from become an even bigger holiday attraction for
explains. refuelling Boeing aircraft operated by Russian millions of Russians than it already was given
In the event the company has one more airlines. the limits the economic and political backlash
petroleum product, outside of raw crude and The ban, introduced by Turkey’s customs against Russia has put on travel options.
gas, that is a foreign exchange income earner. and trade ministry and also forbidding the US media reported that at the end of 2022
NDEP’s refining growth is set against the provision of related services to the American- senior American officials warned that Turkish
background of the unproven nature of the made aircraft, appears to be the latest example individuals were at risk of jail, fines, loss of
crude oil refining landscape. of Ankara caving to pressure from the US to export privileges and other measures if they
Unlike upstream work, which teems with respect Western sanctions aimed at Russia in provided services like refuelling and spare
activity and skills that can be hired round the response to its war in Ukraine. On March 9, parts to US-made planes flying to and from
corner, the refining landscape lacks a robust Turkish customs officials abruptly stopped Russia, and also Belarus, in violation of export
technical workforce. permitting the transit of sanctioned goods controls imposed last year.
State owned NNPC, with combined bound for Russia through Turkish ports. This was consistent with reports that the
nameplate capacity of 445000BPSD, has been With Europe and the US running out US Treasury Department’s top sanctions
the only warehouse of refining skills in the of options for adding more sanctions to official during a trip to Turkey and the Middle
country, but it has been chronically inefficient those already imposed on the Kremlin and East cautioned countries and businesses that
and hasn’t produced anywhere close to 15% sanctions ‘leakage’ a chronic problem, they they could lose access to G7 markets if they
of its capacity in 15 years. “Local support have switched emphasis to more effectively conducted business with entities subject to US
from a technical and operational point of enforcing the wide-ranging sanctions already curbs.
view is lacking”, Falade says. Which is why the applied. Until recent weeks, Turkey’s Erdogan The US has imposed special export
company has always had to bring in Original administration had shown little sign of controls banning Russia from using US-made
Equipment Manufacturers (OEM) personnel actively cooperating with sanctions on Russia, aircraft. The export controls ban any aircraft
to ‘put out fires’, in a manner of speaking. The so analysts are assessing what might have made in the US from flying into Russia
company has been investing in upskilling and changed. One theory is that President Recep or Belarus without a licence issued by the
ensuring that OEM personnel adequately pass Tayyip Erdogan, gearing up for parliamentary Commerce Department’s Bureau of Industry
on the skills. and presidential elections on May 14, needs and Security.
Other challenges have tested the capacity to shield the Turkish economy from the By the end of January, Russian and
to deliver. threat of secondary sanctions “which could Belarusian airlines, including the Russian

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