Statements by U.S. Officials

Roundtable with Coordinator for Eurasian Energy Ambassador Steven R. Mann

Ankara, February 27, 2008

Ambassador Mann: Thanks very much.  It is wonderful to be back in Turkey.  Turkey and the U.S. have achieved a great deal together on energy projects for many years so it’s a source of professional satisfaction for me to come back.  The Bush administration has decided to give additional focus to energy diplomacy issues so I have been asked to come back in this position as Coordinator for Eurasian Energy Diplomacy.  There are new opportunities and challenges in Eurasian energy and my government has decided that we need to devote additional attention to the issues.  Now in doing this, I’ll be joining my colleague Matt Bryza, Deputy Assistant Secretary for Europe and Eurasia, who’s been working intensively and effectively on energy issues for some years.  He will continue his strong role concerning European gas issues.  And he and our Ambassadors in countries around the world will continue to be very active on Eurasian energy.  So I’m proud to be joining that team and adding my efforts to theirs.  I started this work in January and visited Astana, Baku, Istanbul and Ashgabat.  This week I was in Baku.  I have come to Ankara and I leave this afternoon for Ashgabat.  So I have had a series of detailed and productive discussions in Ankara.  I come away from the visit with a much better sense of Turkey’s energy security needs.  I come away with a very strong belief in the possibilities for new Turkish-American cooperation on energy issues.  So I’m grateful to the government of Turkey for this very warm visit and I would be happy to answer any questions that you have. 

Q: We would appreciate if you could let us know who you contacted during your visit here in Turkey.  And you said that you would be taking away some concrete perspective on Turkey’s energy security.  What is your understanding, what’s your assessment of Turkey’s energy security needs?

Ambassador Mann: Well, I met of course with Minister Guler and we had a very good discussion yesterday, with Botas personnel, with personnel in the President’s office, with members of the Foreign Ministry, members of Parliament and then other analysts of the Turkish energy sector.  And in energy security terms, I was updated according to both current and projected Turkish levels of gas demand.  Beyond gas, I’ve gotten a sense of where our potential nuclear cooperation stands and also the possibilities for alternative energy development and I’ve heard a positive assessment of last month’s Clean Energy Technologies Conference in Istanbul.  I had a good update on the Samsun-Ceyhan pipeline; the focus was of course on gas because there’s so much going on that area.  We discussed the difficulties in gas supply from Iran and the cut-off of Iranian gas.  Actually my discussions here follow on discussions that I had a few weeks ago with the CERA conference in Houston.  At CERA in Houston, one of the points that was made is that it’s important to look at Turkey as a market for gas in its own right and not merely a transit country. 

Q: You have mentioned during your meetings: Iran’s cutting gas to Turkey was one of the agenda items.  Considering that, what do you see as potential alternatives to Iranian gas in Eurasia?  Have you discussed with Turkey other alternatives from Eurasia?

Ambassador Mann: We talked about Azerbaijan gas, namely Shah Deniz phase II.  We also discussed  Azeri-Chirag-Gunesli deep gas.  Because I had just come from Baku, most of the discussions centered on Azerbaijani possibilities.  There was also some discussion of gas development potential in Iraq and Turkmenistan.

Q: There’s been a sixth partner announced for the Nabucco project and Turkey is keen on including Iranian gas in this pipeline.  Do you foresee any other sources from the Caspian region for this pipeline?

Ambassador Mann: Well, I think Azerbaijan in our view absolutely has enough gas volumes to supply Nabucco.  Azerbaijan already is a successful exporter of gas and there’s a lot more potential to come.  We don’t exclude Kazak or Turkmen gas in some future time frame but the emphasis really is on Azerbaijani possibilities. 

Q: So are you considering Iran as a possible source country for Nabucco project?

Ambassador Mann: No, we strongly recommend against it, we strongly urge against it.  As a matter of U.S. law and policy, we are opposed to investments in the Iranian energy sector.  The cut-off of gas also calls in to question Iran’s reliability as a supplier. 

Q: I would like to ask a few questions.  One of them will be more about the agenda issues, but the other would be a more global one.  The first question is with the new government, there’s some convergence between Turkey and Iran.  We would like to receive your observation on that point, do you see that convergence too?  And what’s the U.S. government’s approach to this?

Ambassador Mann: I focus completely on energy questions.

Q: Let’s then consider it.  Energy cooperation agreement, they have signed.

Ambassador Mann: Well, I think first of all there’s the issue of U.S. law and policy which is very clear from our perspective.  And in practical energy terms also the record is showing Iran to be a difficult and unreliable partner.  Now I look in contrast at Azerbaijan, at Georgia also and these are countries with which Turkey has really created a warm and productive relationship.  And I think that to my mind that gives Turkey the opportunity to build on successes.  It’s better to build on successes than to untangle problems. 

Q: If the GOT is persistent about its policy to move forward with cooperation with Iran on energy issues, what would be the U.S. government’s approach to this?  And during your meetings, what was your response to the GOT officials if this was ever brought up during the meetings?

Ambassador Mann: Well, our focus was on the Caspian.  Even though it’s a speculative question, U.S. policy is very stable and predictable in terms of Iran.  We strongly oppose new investment and partnership in Iran’s energy sector.
 
Q: There was a second question about OPEC.  There’s a tendency among supplier countries to establish this new union, a gas OPEC.  What’s your perception on this?

Ambassador Mann: It’s a wishful view among some gas supplier countries.  We think that both suppliers and consumers are served best when the market sets the price.  And it’s impossible to me to see how it’s in the interests of the new Caspian producers to give up their autonomy and put their energy sectors in the hands of other countries. 

Q: I have a question linked to another question.  You said you were appointed and you were leaving Ankara tonight but you won’t be based in Ankara or the center of your attention in the region will not be Ankara, correct?

Ambassador Mann: I would love to be based in Ankara or Istanbul.  I’ll be based in Washington and traveling out to the region. 

Q: Your arrival coincides with a very busy time on energy issues and you have just mentioned the change in U.S. policy, namely increased attention on Caspian resources.  It’s an interesting time because Russia has been making some moves recently too.  Over the last week they have signed several agreements with companies in EU countries, in Iran and earlier as you know they have finalized certain cooperation agreements with Kazakhstan, Turkmenistan.  How do you view the Russian impact on this region?  Do you see it as an impediment to future projects?

Ambassador Mann: Let me first clarify that the U.S. position has been very stable for a long time.  The US supports alternative export routes for oil and gas in the region.  But what we found is that there is a lot to do in the region and a lot of opportunities so that’s why the administration has created this energy position.  With regard to Russia, I prefer to talk in economic terms about those issues.  We think that neither the suppliers nor the consumers are well-served by monopoly conditions.  So we’re trying to support the countries of the region in having alternatives to the great pipeline monopolies in both selling a product and in buying products.  And this is not a policy that the U.S. devised in isolation.  Countries of the region have asked for our assistance in developing other alternatives for the transport of oil and gas.  So our policy really is, it’s a policy of competition, transparency and best international practices. 

Q: You have also mentioned that Samsun-Ceyhan was in the agenda items you discussed, are there any developments in this project?  How does the U.S. receive this project?  What’s your opinion?

Ambassador Mann: Well, our belief is that the increasing volumes of oil production in the Caspian mean that there will be a need for one or more Bosporus bypass pipelines.  There are half a dozen projects out there to do this.  We don’t have a position on which one should be built.  So I think the private sector should decide.  But we discussed the project of Samsun, and it looks to me like it has made serious progress since I discussed some years back.  And the success of the project will depend on its success in attracting commitments of oil from the producers.  And that in turn will depend on the commercial terms that the developers offer to the producers. 

Q: As you know Turkey is taking an important step to initiate its nuclear energy.  Do you have recommendations for Turkey?  We know that some American companies are interested in this effort.

Ambassador Mann: Yes, I recommend partnership with American companies.  My sense is that the nuclear cooperation is going well between our countries but my focus is on oil and gas.  And I look back at these years and I see how much Turkey and the U.S. have achieved together with the BTC pipeline, with Shah Deniz.  I’m proud that I was part of that partnership with Turkey in the earlier years.  And it really is an honor to come back and do this again together in partnership with Turkey.  So I think there is a great deal that our countries can achieve together in Eurasian energy and the meetings this week gave every encouragement that we’re going to continue our successful partnership. 

Q: First of all, in IAEA’s 2007 Energy Outlook Report, there is an assessment that the energy giants can no more buy new oil fields and the governments are more active.

Ambassador Mann: Well, 90% of oil is controlled by government-run industries.

Q: So what’s your assessment about this?

Ambassador Mann: I think the critical question is what kind of development takes place?  Is it development that uses market mechanisms, competition, environmental protection, and the most advanced technology?  Or is it development that is from the dinosaur era of state control?  Not all state companies approach energy development in the same fashion.  But I firmly believe in the power of the private sector.  And I think as an American, I see that there are some things government does well and some things the private sector does well.  And economies work best when you give the private sector the power to develop the economy fully and effectively.”