Cyprus PIO: Turkish Press and Other Media, 07-02-08

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From: The Republic of Cyprus Press and Information Office Server at <http://www.pio.gov.cy/>

[A] NEWS ITEMS

[01] The breakaway regime is preparing to establish an Investments Agency

[02] European businessmen visit the occupied areas of Cyprus through illegal Tymbou airport

[03] Murat argues that the increase in the percentage of the citizens during the last ten years is only 7 %

[04] A basketball team of Turkish Besiktas will play with the TRNC youth basketball team

[05] Initiatives by the self-styled ministry of economy and tourism in Britain to promote the tourism to the occupied areas

[06] The church in occupied Thermia village is turned into a Culture and Art House; Talat congratulates the peasants for the initiative

[07] The commander of the Turkish occupation army examines on the spot the problems of the Turkish Cypriot inhabitants of Pyla village

[08] CTP and DISY delegations met in the free part of Nicosia

[09] Euro MP requests that high level contact group for Turkish Cypriot group to be dissolved

[10] Guls visit to Washington D.C.

[11] Turkey starts population census with registry system

[12] President Sezer vetoes oil bill on grounds of national security

[B] Commentaries, Editorials and Analysis

[13] Columnist analyses the history of the Petroleum Law in Turkey and Sezers veto

[A] NEWS ITEMS

[01] The breakaway regime is preparing to establish an Investments Agency

The Agency will also be aiming at improving the environment for investment and attracting international investors to the occupied areas of Cyprus. A strong team at the self-styled Prime Minsters office is working for the materialization of the Agency.

The team is coordinated by Ontac Duzgun, permanent undersecretary at the self-styled prime ministry, and Ozlem Oguz, economy expert. Economist Necdet Ergun, lecturer a the illegal Eastern Mediterranean University, economist Yenal Surec, economist Unal Akifler, head of the Economy Planning Department of the so-called State Planning Organization, Ali Korhan, economy and tourism advisor at the Presidency, Mehmet Basel and Dr. Omer Gokcekus participate in the team. Dr. Gokcekus, who lives in America, joined the team with his students who are conducting their masters degree and will help on the issue of the researches.

It is said that when the project enters into effect approximately two billion-US dollars of local and foreign investments could be realized within 3-5 years.

In statements to KIBRIS Mr Ontac Duzgun said, inter alia, the following:

Both serious investments and about three billion-dollars of capital are waiting for a decision at various bureaucratic levels as a result of our gaining legal status, even though partly, especially after the Annan Plan and the referendum procedure. The state should be organized according to it. It is an application which will pave the way for consultancy in a professional manner in the country. .

Furthermore, the chairman of the Turkish Cypriot Chamber of Commerce, Erdil Nami has told KIBIRS that the proposal for the establishment of such an agency belongs to them, that this step is right and that they were late in materializing it.

(ITs)

[02] European businessmen visit the occupied areas of Cyprus through illegal Tymbou airport

A delegation, headed by Cavallaro, arrived in the island the day before yesterday through the illegal Tymbou airport and met yesterday with Turgay Avci, self-styled minister of foreign affairs.

Mr Cavallaro said that their aim is to encourage the cooperation with the TRNC in the fields of commerce, sports and economy and to promote the image of the TRNC within the business world of the EU. He noted that their target is the cooperation between the illegal Eastern Mediterranean University with the Italian universities of Palermo and Enna.

He said that their aim is also to promote cooperation between the Turkish Cypriot Chamber of Commerce and the Small and Medium Size Entrepreneurs and Professionals Chamber of Italy as well as with the chambers of Barcelona and Madrid.

In his statements, Mr Avci thanked the foreign delegation for inviting them to participate in a folkloric festival in May and added that they will be opened to the world with initiatives in the fields of society, sports and culture and thus they will find the opportunity of explaining what the TRNC and the Turkish Cypriot people experience.

(ITs)

[03] Murat argues that the increase in the percentage of the citizens during the last ten years is only 7 %

Speaking at a press conference yesterday, he noted that only two thousand persons out of the additional 65 thousand are citizens and the rest are the registered workers, students and persons residing in the occupied areas with a residence permit.

The paper notes that this statement is different from what prime minister Soyer had said. Mr Murat organized the press conference yesterday in order to reply to some municipalities which demand more financial aid from the government.

Furthermore, Turkish Cypriot daily HALKIN SESI newspaper (08.02.07) refers to the issue of the demands of the municipalities under the title Uncertainty for resignation in the municipalities and reports that four founding members and two reserve members in the administration of the Municipalities Union, who are among the 19 mayors looking for the support of the public opinion for their demands to the government, announced their resignation.

The mayor of the occupied part of Nicosia Bulutoglulari said that they submitted their resignation orally and that they could do it in writing if necessary.

Meanwhile, Turkish Cypriot daily YENI DUZEN newspaper (08.02.07), under the title The percentage of the TRNC citizens is 70 %, publishes the assessments of Mete Hatay, researcher at the International Peace Research Institute (OSLO), on the results of the population census that were announced recently.

According to Mr Hatay, the citizens of the TRNC, including those who are holders of dual citizenship, reach the 70 % of the inhabitants of the occupied areas. He criticized those who say that the Turkish Cypriots are only the 50 % of the population and argued that the meaning Cypriot must be defined first.

He noted that the citizens in the 1996 census had been 163.000, whereas now they increased to 178.000. This is not a big increase. It means that we have a relative stagnation on the population of our citizens, he claimed.

(ITs)

[04] A basketball team of Turkish Besiktas will play with the TRNC youth basketball team

(ITs)

[05] Initiatives by the self-styled ministry of economy and tourism in Britain to promote the tourism to the occupied areas

Furthermore, Turkish Cypriot daily CYPRUS TIMES newspaper (08.02.07) refers to the issue under the title UK tourism market readying for TRNC. The self-styled minister of economy and tourism, Enver Ozturk has said that with the intensive advertising in the UK, the British tourist will be able to find out how to discover a place that is a witness of 9000 years of history and many rare beauties such a the Cyprus Orchids.

(ITs)

[06] The church in occupied Thermia village is turned into a Culture and Art House; Talat congratulates the peasants for the initiative

Mr Talat congratulated the committee for its initiative towards restoring the church of the village and noted that both churches and mosques are a part of Cyprus cultural heritage.

Mr Halil Anildi said that during the past few years the interest of the locals and foreigners is developed in Thermia and the population of the village increased. He noted that they had established a committee aiming at bringing together the peasants with the foreigners and for their acting together.

Mr Anildi thanked Mr Talat for the presidencys support for the restoration of the church. He said that the restoration has not been completed yet and added that they are planning to use the church in the social activities as Thermia Culture and Art House.

(ITs)

[07] The commander of the Turkish occupation army examines on the spot the problems of the Turkish Cypriot inhabitants of Pyla village

General Kivrikoglu visited the Pergamos crossing point where he was briefed about the complaints of the Turkish Cypriot inhabitants of Pyla because they go to their homes after securing visa.

(ITs)

[08] CTP and DISY delegations met in the free part of Nicosia

In a joint statement after the two-hour meeting the two parties referred to the Gambari procedure and called on the leaders of the communities to meet for reaching a solution to the Cyprus problem.

The two parties stressed their commitment for exerting efforts towards the reunification of the island under the roof of a bi-zonal and bi-communal federation and for a common prosperous future of the communities in the EU.

They also expressed the opinion that more crossing points should be opened and that the Ledra Street crossing point should also be opened through the application of the same practices applied at the other crossing points. DISY and the CTP called on the leaders of the two sides to consult on the issue of the demilitarization.

(ITs)

[09] Euro MP requests that high level contact group for Turkish Cypriot group to be dissolved

Mr Karatzaferis did not take part in the Groups latest visit to the island. Furthermore, Georgios Karatzaferis had earlier presented a written question to the European Council, asking why the Mayor of Girne Municipality Sumer Aygin attended an international meeting in the Seville city of Spain, concluded illegal Bayrak.

[10] Guls visit to Washington D.C.

We asked the United States to take a concrete and significant step in the fight against PKK terrorist organization, said Turkish Foreign Minister Abdullah Gul who held a press conference after his talks in Washington D.C.

Previously, PKK leaders were taking shelter in unfriendly regimes. But now, PKK leaders are making interviews on television channels in a friendly country. The United States -- which earlier stated it could not divide its forces in Iraq-- has now changed this manner, noted Gul.

When asked whether Turkey will take a military measure if a step is not taken in a short time, Gul said, the United States did not make any contrary suggestion.

We always have rights based on international laws. If we believe a result needs to be reached, we don't hesitate to take action. We have conveyed to U.S. officials that they are late to take action in the north of Iraq and Turkish people want to see an action. U.S. officials are aware of this, Gul said.

When asked whether the United States has an expectation about Turkey's developing a mechanism for return of people in Makhmour camp (to Turkey), Gul said: Citizens occasionally return to Turkey in groups. These citizens are settled in villages, and the process is continuing about the issue. There are also women and children in Makhmour camp. The important thing is that we have to be sure the camp will not be controlled by someone else when it is evacuated."

Noting that not only Turkey but also other regional countries are sensitive about Kirkuk problem, Gul said that all countries in the region are uneasy about escalation of this problem. "I met Egyptian Foreign Minister Ahmed Aboul Gheit in Washington D.C. He is also sensitive about this issue. It is necessary to make population census and determine who can cast vote before the referendum is held in Kirkuk."

Noting that the problems stem from uncertainties in the constitution, Gul said that the constitution follow-up committee should speed up its studies.

Gul said that Turkey does not have territorial pretensions on Iraq, and borders (between Turkey and Iraq) are set. He stressed that Kirkuk belongs to whole Iraq.

Stressing the importance of protection of Iraq's unity and integrity, Gul said that U.S. officials define fragmentation of Iraq as an unacceptable alternative.

In regard to the resolution on so-called Armenian genocide submitted to the U.S. Congress, Gul said: It is a big threat which will poison all our relations." Gul quoted those whom he met in the United States as saying that it was one of the weaknesses stemming from parliamentarian systems.

"It is a resolution against Turkey that would ruin everything. I talked sincerely and I also said that its impacts would not be temporary," FM Gul underlined.

Some circles said Turkey assumed an attitude as if it admitted that this resolution would be approved, Gul said.

We think that it should be prevented. It is bad for both Turkey and also the United States. No one has right to poison relations (between Turkey and the United States) during such a period. I believe that the (U.S.) administration is sensitive on this matter and does what is necessary. We should also inform parliamentarians, senators and people on this matter.

[11] Turkey starts population census with registry system

Population census based on addresses (registry system) has started in 81 cities, and it will be completed by the end of June, said State Minister Besir Atalay on Wednesday.

Atalay told A.A that this is beyond a census, it is a complete change in the system. Previously everyone was confined to their houses during census.

In the new system, the population of Turkey will be censused by the middle of the year, said State Minister Atalay.

In the new system, address and citizenship number will be registered together. Those citizens who are registered in a wrong or different address will have trouble in their procedures in public offices, said Atalay. He added, multiple registries will be avoided thanks to this system.

Consequently population and migration structure will be defined, indicated Atalay who requested citizens to register at the places they are living.

Residence certificate will be history with this system, also said Atalay.

The census will be carried out in three groups: people who live in Turkey and are citizen of Turkish Republic; people who are citizens of the Turkish Republic but are living in foreign countries; and aliens who are living in Turkey.

[12] President Sezer vetoes oil bill on grounds of national security

The president vetoed a bill regulating the export of oil and petroleum products on Tuesday, citing risks to national security.

President Ahmet Necdet Sezer explained the reasons for his veto saying that the bill made crude oil - a resource of strategic importance - subject to exporting activities, thus creating a risk for national security, the presidential press office said on Tuesday.

The statement compared the bill to an older law dating back to the year 1954. The first article of the proposed law aims to improve and expand oil production while its third article proposes regulating the licensing of oil production and resale but did not stipulate that national interests would be made a priority to achieve its stated purpose. The article also would call for review of license applications, which are mentioned in relevant articles of the 1954 oil law. Details about how national interests would be protected were also excluded in other articles of the stipulated law, in contrast to the two articles in the 1954 law that prescribe methods of securing national interests in detail.

The statement also said the proposal went against an article in the constitution which stipulates that no activity could be held above national security interests. "In other words, the fact that the protection of national interest is not being explicitly mentioned in the law obviously does not eradicate the responsibilities and duties of state agencies assigned to them by the Constitution. These agencies and officials are under the obligation of preserving national interests and public good as a priority in every activity and procedure. Undoubtedly, this responsibility is larger when the products in question are of high strategic value such as oil and natural gas resources." Sezer said the proposed law did not explicitly clarify the percentages of petroleum and natural gas products to be allotted for domestic use or exports, allowing these products to be sold to other countries without regard to the domestic consumption requirements.

Another reason for the veto was ambiguity in the percentage of state ownership of oil produced in the country.

The president, who said resources located in the country's territory belonged to the entire nation, urged the introduction of limitations on exportation of crude oil and natural gas in the proposed law.

Oil production in Turkey Oil provides over 40 percent of Turkey's total energy requirements, but its share is declining as the share of natural gas rises.

Around 90 percent of Turkey's oil supplies are imported mainly from the Middle East and Russia. Turkey's port of Ceyhan is a major outlet for Iraqi oil exports, but oil flows have been sporadic since late March 2003, following the outbreak of the Iraq war.

Three companies account for the majority of Turkey's oil production - the Turkish State Petroleum Company (TPAO), and foreign operators Royal Dutch/Shell (Shell) and Exxon Mobil.

In December 2003, a petroleum market reform bill was passed in parliament which aims to remove state controls on the sector, to liberalize the pricing of oil and oil products, end restrictions on vertical integration, and integrate pipelines, refining, and distribution functions.

In early 2004, the Turkish government approved the sale of a 66.76 percent stake in the then state-owned oil-refiner Tüpras for $1.3 billion to a group led by Russia's Tatneft. In late May 2004, a Turkish court suspended the sale after a union filed a lawsuit claiming that privatization procedures were not properly followed.

[B] Commentaries, Editorials and Analysis

[13] Columnist analyses the history of the Petroleum Law in Turkey and Sezers veto

The old Petroleum Code No. 6326 in its original form (1954) was drafted with assistance from specialists of international expertise and renown and contained a multitude of very liberal and attractive incentives for oil exploration and production. However, during subsequent revisions (particularly, in 1973), most of the incentives were deleted, despite the fact that Turkey was and still is an energy-deficit country. In early 1980s, although not at the same level or scope as in the original, some of the minor incentives were re-incorporated into the Code. However, these fell pitifully short of the objectives and domestic Turkish production steadily declined while consumption requirements kept rising.

Several governments in the immediate past had not been able to push through new legislation, despite the fact that various draft laws were prepared and widely discussed. It is the current government which finally succeeded to push through a major overhaul of the system. Hence, the Parliament adopted a new code (Law No.5574, January 17, 2007), replacing Law 6326 in its entirety. The new Code will be supplemented by a set of Regulations which are as yet unpublished. This Code must be greeted as a step forward, albeit somewhat insufficient.

It is regrettable, however, that instead of focusing on where we are today as compared to 60 years ago (and why we have not been successful), we observe the same old chauvinistic criticism being repeated. The fact is that the subject of exploration and production of petroleum shows a dismal failure since 1954. As against great increases in our crude oil requirements each year, petroleum activities both on-land and offshore have steadily decreased with corresponding decrease in production. Since the Council of Ministers landmark Decree in 1966, declaring and reasserting Turkeys exclusive rights to exploration and production, not only on the Turkish territorial waters but also on the Continental Shelf area and the Exclusive Economic Zone contiguous thereto, as issuing from International Maritime Law, only a handful sea-drillings have been made. Yet, all over the World new substantial oil is being found on, particularly, offshore areas.

Turkey today produces about 60,000 barrels of crude oil daily, as against 800,000 it consumes. In 2005, the last year for which statistics were located, the total of wells drilled in Turkey by 35 different operators was 89, bringing the overall total wells drilled since 1934 to 3118. The naked truth remains that some of the countries such as Libya, Egypt, Algeria, Nigeria, and Gabon which have initiated their oil and gas legislation much later than Turkey, have surpassed and are now selling us oil and gas.

The new Code is much simplified as compared to the old, which in its attempt to cover all relevant issues in a single text had contained 135 articles (along with many more in its supplementary Regulations).

The following may be cited among the new incentives introduced by the Code:

Aggregate tax burden not to exceed 40 % of corporate income; Royalties progressively reduced based on such factors as production rates, production from offshore areas; secondary production or low-gravity crudes; VAT exemption on purchases of goods and services for the conduct of bona fide exploration activities ; Reduced corporate tax withholding rate (5 %) on professional services when they relate to exploration; Stamp tax exemption on papers relating to exploration and production; Exemption from Special Consumption Tax for heavy-duty tractors, loaders, transporters, mobile cranes and field vehicles.

The new Code has not yet been publicised in the Official Journal, since the President, invoking his prerogative under the Constitution returned it to the Parliament on February 7, 2007, to be debated again. The Presidents objections, in summary, are that the new Code fails to include the national interest criteria in the grant of petroleum rights; the grant of the right to export all production may place the country in difficulties during extraordinary times; provision of the old Code should be reinstated disallowing companies owned or controlled by foreign governments to obtain petroleum rights; and, reductions envisioned in royalties cannot be justified. The President also objects to allocation of half of the royalties to provinces wherein the production licenses are issued.

Respectfully, we beg to differ. From a legal standpoint, it is immaterial whether or not the national interest criteria is inserted or emphasized upon in the new Code, inasmuch as it is an underlying principle of all legislation of the Republic, anyway. It does not need to be reaffirmed in every piece of legislation and all governments are duty bound to comply with it, especially when the grant of rights is in question. Any application which the Government deems to be against national interests could and should, of course, be denied; the right to export all production may be curbed invoking authority under other laws already existing; the old Code did not entirely disallow companies owned or controlled by foreign governments, as it provided for exceptions per Council of Ministers decree, and such exception was invoked at least 7 or 8 times for such companies from several friendly countries; in view of current state of Turkeys geology, economy and geopolitical situation, reductions in royalties based on quantity and quality and provenance (onland or offshore) do make sense. On the other hand, we feel that the President is quite correct in demanding that the royalty revenues not be shared with provinces, but rather be incorporated in the national budget.

In summary, the new Turkish Petroleum Code, although not sufficiently bold, represents a realistic and correct step in the right direction. It should serve to attract new and serious players with a view to increase exploration and production of oil and gas in Turkey in the immediate future.

EG/

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