Turcas Overview 

Turcas Petrol (Turcas), whose foundation dates back to 79 years ago, is a holding company today.

Turcas, with its leading position and immense experience in the Turkish energy sector, having realized numerous successful cooperations, has an international institutional culture. Today, Turcas advances with big strides towards its target of being an “Integrated Energy Company” working in areas such as petroleum distribution, oil refining, petrochemicals production-distribution-marketing, power generation-distribution-trading, and natural gas importation and wholesale in the liberalizing energy markets.

History
Türkpetrol and Lubricant Oils, founded in 1931 as Turkey’s first privately-owned petroleum distribution company, which became a joint stock company in 1936, teamed up with British Burmah Castrol in 1988 to establish Turcas Petroleum. The name “Turcas” evolved from the combination of the first three letters of Türkpetrol and Castrol. Following the Initial Public Offering of the company’s minority shares in 1992, Tabaş Petroleum acquired the majority of the company’s shares in 1996. Subsequently, Tabaş Petroleum and Turcas Petroleum were merged in 1999 and the new entity was named Turcas Petrol.

Fuel Distribution
Significant portion of Turcas’ current Net Asset Value is constituted of the shares owned in Shell & Turcas Petrol (STAŞ). In 2005, a Joint Venture Agreement was signed with The Shell Company of Turkey Ltd. for retail and commercial sales, marketing and distribution of petroleum products and lubricants, and STAŞ was founded. STAŞ, in which Turcas has a 30% shareholding, began operations on July 1, 2006, having obtained the required licenses from the Energy Market Regulatory Authority. The 650 Türkpetrol branded fuel stations of Turcas and 600 Shell branded fuel stations of Shell Turkey, along with both companies’ logistics centers, storage and filling facilities, and lubricant oil production plant and marketing activities were gathered under STAŞ. As of the beginning of the second half of 2006, Turcas continues petroleum distribution, trade, industrial and commercial sales, and lubricant oil activities through STAŞ. STAŞ, apart from being a leader in the Turkish fuel distribution market with a network of nearly 1,300 nation-wide Shell branded fuel stations and related business units, and a net turnover around TL 8 billion in 2009, is one of the largest enterprises in the Turkish economy.

Refining and Petrochemicals
SOCAR & Turcas Energy (STEAŞ) was founded as a joint venture company at the end of 2006, with the target of becoming a leading oil and gas player in the region covering Turkey. STEAŞ won the privatization tender for the sale of 51% of the shares of PETKİM Petrokimya Holding, which stood out as the most important privatization in Turkey in 2007, and acquired the controlling shares on May 30, 2008 by paying 2 billion 40 million USD to the Privatization Administration. STEAŞ, with the synergy radiated by its partners, is focused to become an integrated oil/energy company in the fields of refining, petrochemicals, and natural gas. STEAŞ founded SOCAR & Turcas Petrochemicals in April 2008 as a 100% owned subsidiary for the management of PETKİM. Consequent to this acquisition, STEAŞ started the development of a Feedstock Refinery Project at the Petkim site, and, for this purpose, established SOCAR & Turcas Refining on September 2008 as a 100% owned subsidiary.

The Environmental Impact Assessment study for the project has been completed and the Final Report has been submitted to the Ministry of Environment for evaluation. Ministry approved the report and issued the Environmental Impact Positive certificate as of December 8th, 2009. Upon the expected receipt of the refinery license in 2010, construction is planned to be completed by 2014-15.

Turcas, on the other hand, is a 5% shareholder of ATAŞ Anadolu Refining (ATAŞ), Turkey’s first privately-owned oil refining company which started operations in 1962. Having terminated its refining activities and completed new investments within the last 4 years, ATAŞ today operates as the largest oil products storage terminal in the Mediterranean area, with a total installed tank capacity of 570,000 cubic meters.

Power Generation, Distribution and Trading
Turcas united its existing and potential power sector subsidiaries under the umbrella of Turcas Energy Holding. Turcas Energy Holding is the majority shareholder of Turcas Power Generation, Turcas Wind Energy Generation, and Turcas Power Trading, and a 30% shareholder of RWE& Turcas North Power Generation. Additionally, the company signed a Shareholders Agreement with the Spanish energy company Iberdrola S.A. in 2005 in order to jointly participate to the electricity distribution privatizations in Turkey.

Turcas Power Generation signed a Joint Venture Agreement in 2009 with RWE AG of Germany, one of the world’s leading utility companies, to construct two large-scale power plants, one based on natural gas and the other based on imported coal (this agreement is the revised version of the joint venture agreement signed with E.ON of Germany in 2007 securing the continuity of the project). Within the scope of this agreement, two joint venture companies, namely RWE & Turcas South Power Generation and RWE & Turcas North Power Generation, were founded, in which Turcas subsidiaries own a 30% stake whereas RWE subsidiaries own the remaining 70% stake.

In order to make renewable and sustainable energy investments, Turcas Wind Energy, a wholly-owned subsidiary of Turcas Energy Holding, applied to the Energy Market Regulatory Authority (EMRA) for licenses to make wind farm investments with a total installed capacity of 400 MW at 6 different sites across Turkey. Development of the projects and wind measurements are ongoing while the final investment decisions will be made after obtaining the relevant licenses.

Natural Gas Importation and Wholesale
Our natural gas subsidiary Turcas Gas played a leading role in the deregulation process of the Turkish natural gas market, by initially starting to sell 100 million cubic meters of natural gas to its eligible customers on December 19, 2007, based on the Natural Gas Wholesale License obtained from EMRA. Turcas Gas aims to considerably increase its wholesale capacity parallel to the liberalization of the market, and to become one of the leading private sector companies in the gas importation and wholesale market.