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Transcript by
Federal News Service
Washington, D.C.

FREDERICK KEMPE:  It’s my honor to chair this first panel of our forum.  And this is the panel where we basically say thank you to Prime Minister Erdogan, and now what does this all mean for business?  We have representatives of private business.  We’ve heard Prime Minister Erdogan outline quite a compelling vision and view for the region.  And not only are we talking in the next two days about regional integration, he, in many ways, was talking as a regional integrator in both an economic sense, but newly and interestingly, also in a political sense. 

So I think I’d like to turn to the Turkish member of our International Advisory Board, Güler Sabanci, first to give a little bit of a response to what you heard from Prime Minister Erdogan, but also to talk a little bit about what businesspeople see and have to take bets on, which is we very often at these conferences talk about business opportunities, but in a region like this, you can’t avoid talking about risk.  So response to Prime Minister Erdogan, but also a little bit of an idea – as you look at this region, what do you see as the – as the risks that face you going ahead?

GÜLER SABANCI:  Well, thank you, Fred, and thank you for the Atlantic Council to giving me this opportunity.  It was actually also very interesting for me to really listen to the Prime Minister Erdogan.  And when I was listening to Prime Minister Erdogan, I really thought about this fact that, you know, when people write about Turkey, we are written sometimes – Turkey is a Balkan country.  Turkey is an Eastern European country.  Turkey is a Middle Eastern country.  Turkey is a part of Caucasus.  So it is obvious that Turkey is all of them and not only one of them.  So that is obvious. 

And his speech definitely put the focus on this overall perspective, which – I find it very encouraging personally to see that he personally and his team see their responsibility as being maybe the only G-20 member around this region.  He does feel this responsibility that this is an issue.  Energy, the next game of this century, is the issue which requires common vision, common policy, and the place to do it is G-20.  And he does feel that responsibility, which, of course, as a businessperson, I feel very much encouraged to see that.  And I also support the fact that yes, we do need a common vision.  We do need common goals on these things. 

And the other thing is, of course, I also strongly believe to the fact that – and we’re going to go and talk about the opportunities and risks in this region also – it is clear that all these challenges that we have in this region, and on a subject which is so vital to all of us, like energy, is the fact that this region about, you know, on the left-hand side of Turkey, the 70 percent of the world, resources of oil and gas, is neighbors of Turkey.  And on the other side is the biggest market, Europe and West.  So if we put all of them together and we look at the region – I don’t look at it country-by-country, but it is true that – what, as private sector – how can we turn this challenges into opportunities?  And we definitely need the government’s support.  We definitely need common vision and policies that encourages us to solve these challenges and turn it into an opportunity. 

And we are living in an area – I strongly believe that the past revolution, which is the space revolution – I call it – is – was triggered and was directed by the competition.  But this era, the energy game – this is the era – is not going to be by competition.  It has to be by collaboration, coalitions, working together, teaming up together, and, of course, for that, we have to really believe in the common interest.  And I am feeling more and more – and I hope that this forum will also contribute to that understanding.

MR. KEMPE:  So the big possibility is greater collaboration.  What do you see as the largest – if there is one single risk to your business, what is it?

MS. SABANCI:  Well, let’s face it.  We all talk about peace, but underneath that peace we know that we need to have better governance in this region, better democracy.  And for us, for private sector to survive, we definitely need good working market economy. 

MR. KEMPE:  And so the danger is that may not happen.  So let me turn to Dinu.  Let me to turn to Dinu Patriciu.  You’ve had a vision for what this reason ought to be.  We’re hearing a little bit today about Turkey as the center, sort of the hub around which there are spokes.  Maybe that’s my own language.  But as you heard Prime Minister Erdogan, how does that fit together with your own reach, your own vision of the region? And then I’ll circle back and ask you about the biggest risk that you see after that.

DINU PATRICIU:  No, I can answer – I can answer to your question only in one, because this region historically for hundreds of years suffered from integrators and disintegrators.  That’s history.  (Chuckles.)  Turkey more suffered because of disintegrators, and us, the others in the Balkans and in the Caucasus – of integrators, especially from the East in the last hundred years.  And then, of course, anybody would – will like to be an integrated, integrator – will fail. 

But I don’t think that Turkey wants to be an integrator.  I think wants to be part of a common effort of jointly making something together, creating a region, not to ask – nobody to ask where from is Turkey, from the Balkans, from Europe, from Eastern Europe, from the Middle East, but from the Black Sea region to get a common denominator of all these nations around the Black Sea.  And historically, traditionally, culturally we have this right to look for and find this common denominator, and then become a kind of union, the union of the Black Sea.  That’s my vision, if you want, which has –

MR. KEMPE:  But even a political – even a political and economic union.

MR. PATRICIU:  Even a political – if I remember well how the European Union started 50 years ago, maybe in 30 to 50 years from now we can become the same thing, and –

MR. KEMPE:  Instead of a coal and steel community, an oil and gas community.

MR. PATRICIU:  – yes, and a place of transport of energy between the East and West.  And unions intersecting themselves can be envisaged for the future.  Countries which are being part of more international organizations in the same time can be envisaged.  I don’t see Europe becoming a super state.  And, in fact, this introducing in the region another wall, like we had for 80 years – another wall called the Iron Curtain.  Now that we have some countries inside the European Union and some countries outside the European unions, union, probably we are creating a new wall in a way or another, despite partnerships and so on.  Then this is my answer to all your questions, if you want.

MR. KEMPE:  Oh.  Well, integrator or disintegrator – and you’ve talked movingly in the past about how the Black Sea is kind of a measure of that, as it has been a lake belonging to different people at different times. 

MR. PATRICIU:  Yes, but I use this metaphor last year.  I don’t want to use it also this year.  (Chuckles.) 

MR. KEMPE:  (Chuckles.) It’s such a good one though.  Yeah, so –

MR. PATRICIU:  The Greek lake, the Turkish lake, the Russian lake willingly – because, gladly enough, it didn’t happen, and now any European lake.

MR. KEMPE:  So that’s got to be – okay, we’re – I’m going to make this quite open, so people jump in where you want to on the questions, but I want to go first to Mr. Quadrino and Mr. Sachinis.  Edison and DEPA recently signed an MOU with the Turkish company Botas to construct an interconnector pipeline through Greece and into Italy.  So we’re talking about integration and disintegration.  This is integration.  And so it’d be linked up with the Greece-Turkey pipeline, and perhaps also in Nabucco.  So is this – and Güler Sabanci talked about a new silk road potentially running through Turkey at a conference in Monaco I think just this week –

MS. SABANCI:  Yes, just recently, yes.

MR. KEMPE:  – just this – recently.  So let’s talk about this a little bit.  Is energy the new silk road, and are you building it?  Are the two of you building it?  And then we’ll – I’ll come back to this – (chuckles) –

MS. SABANCI:  It’s part of it –

(Cross talk.)

MS. SABANCI:  – can built it.  (Laughter.)

HARRY SACHINIS (?):  Well, the new silk, or, the new gold, is oil and gas, of course.  And as Europe, we really need very much the Southern Corridor, the so-called Southern Corridor, which is a corridor that goes from the Caspian Sea to Europe, taking advantage of the gas that is in the region, not only the (inaudible, cross talk) –

MR. KEMPE:  Can everyone hear?

MS.    :  No.

MR. KEMPE:  I think something may be wrong with your microphone. 


MR. KEMPE:  Yeah.

MR. SACHINIS:  It’s better?  Is it better?

MR. KEMPE:  I guess it’s good. 

MR.:  Yup.

MR. KEMPE:  It’s great.

MR. SACHINIS:  So I was talking about the Southern Corridor, to say that the corridor that goes from the Caspian Sea to Europe, taking advantage of all the gas of the region.  And indeed, there is a lot of gas, and there is not only the Azeri gas, which is the only gas available today – today means in the next five to seven years – but also the Turkmenistan gas, the Iranian gas, the Iraqi gas.  So around the region there is a – the biggest reservoir of hydrocarbons available for either Europe, or Asia.  So talking about Eurasia, you see the interest; that’s why some of the gas coming to Europe and not all the gas going to Asia.

The deal that we have struck with Turkey and Greece and Bulgaria as well – because is also known as – to Bulgaria – as the size of the gas available today, to say the Azeri gas that’s in the region of 10 to 12 billion cubic meter of gas available to the Turkish border, to Turkish-Greek border.  And some of the gas will be for Greece, some for Bulgaria, and the rest for Italy, a true Italy, for the rest of Europe. 

One day down the road, further gas will be available for sure, and I think too Iraqi gas in my mind will be the first available maybe 10 years from now, or 12 years from now, and then one day the Iranian gas, when the political problem will be settled, and – why not – the Turkmenistan gas when the Caspian Sea-or-lake status is finally decided – is it a lake; is it a sea?  And the crossing of this lake or sea is possible or not possible. 

Also Turkmenistan will provide a lot of gas to this corridor.  But what is important is to start as soon as we can.  And I think that our project is the one that has the chance to start sooner than other project that have much bigger quantity of gas to transport in order to justify the investment.

MR. KEMPE:  Thank you for that answer, and this really compliments what you’re talking about, which is 70 percent of the resources in these huge markets. 


MR. KEMPE:  And one is only really getting started, from what you’re saying, in terms of what’s possible, but – please, yes.

UMBERTO QUADRINO (?):  I would like – maybe I would like to add a couple of comments.

MR. KEMPE:  Yes.

MR. QUADRINO:  Absolutely.  We really want to see one of these days Caspian gas flowing through Turkey, you know, as Azeri gas, or any other gas from there flowing through Turkey to Europe.  I think the important thing of the pipelines that we’re building, and specifically this pipeline, ITGI, is it’s not only for Italy, it’s not only for Bulgaria – and we have done a lot of work to ensure that we have these interconnections in place, but then through Bulgaria to the rest of southeastern Europe.  So it is important for the security of Europe.

But let me mention that there are details that need to be worked out.  The important thing is that everything is moving to a close over the next several months, so hopefully, by the beginning of the year we will have agreements in place that will be solid, that will connect.  And it was interesting.  I was looking around the room earlier, and there were political representatives from all the countries that were involved, so there will be the final agreements that will indeed connect Azerbaijan with Turkey, with Greece, with Bulgaria and the rest of the region, with Italy and beyond. 

So I think that’s an important project.  And it is important for the – for Southeastern Europe for one more reason.  Greece and Turkey work very well together, and the gas will flow through both countries.  But with Greece – the way we see it is that it will be – it will give the possibility to create a regional hub of energy in that part of the world. 

And when I’m talking about regional hub, I’m not mentioning it just because of national interest or anything like that.  I’m mentioning it because of market interest, because when you have, in a place like Greece also, gas flowing in from Russia, gas flowing from LNG from different places, gas flowing from Azerbaijan through Turkey or other areas, and when this pipeline is built, potentially, in the case of need, gas flowing all the way from Africa, through Italy, into Southeastern Europe, then, really, what you create there is a hub.  And when you have a hub with flows of gas from different places, then you have pricing power.  Then when everything meets there, then you can have better prices for the whole region.  So that can really make a change in the region. 

MR. KEMPE:  Isn’t that a little utopian?  What stands between that, your vision, and – what stands between now and that reality?

MR. QUADRINO:  Not that much, because we already have the pipeline between Turkey and Greece that has been operating for a few years.  When we get the gas from Azerbaijan flowing to Italy through that – through our connection – then you’ll have the reverse flow from Africa through Italy, through other pipelines that Edison is building.  So we’re not that far away from that.  And –

MS. SABANCI:  Well, that’s very good.  I mean, I think this would be a good example, because as we all know in business, you know, the first one to do the first one is not very easy one.  I think if you could pull this one out, then the rest will come, but –

MR. PATRICIU:  It’s like a Hoover that will – (chuckles).

MS. SABANCI:  – you must do a good model, a business model it has to be, so that we can all copy.  (Laughter.)

MR. KEMPE:  I’m going to come back to the question of risk, but for Dinu – Dinu, my recollection is that you’re not quite as bullish on pipelines solving the problems of the world as some others.  But as you look at the – these pipeline dreams that are being outlined here, do you see that – this as an – something that could capture this integration possibility that you have?  And then secondarily, what do you see as the greatest risk to your own business interests in the region, but also – but also to the development of the region as a whole?

MR. PATRICIU:  I think this project has a lot of chances because it’s a smaller project, and that is an advantage.  Small is beautiful in this – (laughter) – pipeline business, because gigantic pipelines are not so easy to build, not technically, but politically, because they make too much noise.  But I congratulate you that this project is very discrete and is going further very quickly and pragmatically.  If I we speak about the risks in the region, I think the biggest risk is (inquiries of the legislation.  We don’t have enough uniform double-taxation treaties, commercial treaties, to allow the free trade, really, in the region.  And that’s the biggest challenge we have to face, and maybe to establish as a goal for our Eurasia Center. 

MS. SABANCI:  I agree with him.  This environment of legislations, a common legislation, which facilitates, which encourages – that’s private sector, and also, of course, that helps us to better know what we are going into.  I mean, you know, that’s very important. 

MR. KEMPE:  May I jump – (inaudible, cross talk) –

MS SABANCI:  Or that we need – we need the support of the governments.

MR. KEMPE:  What do – what do you see as the biggest problem in terms of legislation that one needs to fix?  What does one have to go after? 

MS. SABANCI:  Well, as Rifat Hisarciklioglu has also said in his speech, Turkish private sector is trying to get a lot of – yeah, they are highly interested, and they are trying to get a roll on this.  But as Dinu said – you know, it is this double taxations and also the – in some cases I hear that there is not enough – not only incentive, but also, it was – I was very pleased to hear the prime minister of Georgia saying that – you know, to – easing up to do the business to private sector to get a role in his country.  But not every country is like that.  So you need to do a lot of permissions, a lot of legislation.

MR. QUADRINO:  I think – exactly.  It’s the stability of legislation rather than legislation itself.  And I think when you have common legislation across multiple countries, then it is more difficult to get away from that.  I’m not saying that the European Union is a model for everything, but the fact that within a union you have similar laws and you have guidelines, and everyone is moving towards these guidelines –

(Cross talk.)

MR. QUADRINO:  – some kind of standard to move towards.  So if some similar standard was applied to the countries in the region, that could be.

MR. KEMPE:  And that’s the problem, is you don’t have a similar standard, and the standards are changing on you as you try to do business.

MR. QUADRINO:  Yeah, yeah.

MR. SACHINIS:  May I add something about his – what we struggle with is the cost of capital and the risk associated to a country.  And every time we have a – an investment project in Turkey or in the area, we have a problem with the discount rate.  So what is the discount rate?  Well, it’s the cost of money, the cost of your capital – (inaudible) – on the cost of the money you lent from banks, and the country risk.  So what is the country risk?  Well, it is something that the rating agencies state for a certain country, and it – as I – as the instability of a country – that is not only the political instability, is the business environment instability that matters.  And this counts for three, four, five points of discount. 

At the end of the day if you have to make an offer, a competitive bid, and you have another rate of 15 percent because the recontrix (ph) is very high, you never succeed.  You never succeed, and you do not take the decision – the right decision to invest in a country.

MR. PATRICIU:  Yes, but you’ll not change the mentality of the bankers, which are thinking about the country risk as a jolly joke that they have in their pocket – 

MR. SACHINIS:  (Chuckles.)  This is also true.

MR. PATRICIU:  – to cover their asses in front of their bosses.  (Laughter.)

MR. SACHINIS:  This is also true.

MR. KEMPE:  I’m going to go to the audience for questions.  I have plenty more of my own, but identify yourself and to whom you’d like to address your question.  I’ll pick up this one first. 

Let me just say one thing.  Part of the beauty of this forum is we actually work issues at our Patriciu Eurasia Center in Washington and around the region between forums.  And I see this – I think Dinu is right.  I think this is an issue that we can work.  And if we get the right coalition of businesspeople from the region laying out the right set of impediments and what governments ought to do to solve the problem, I – you don’t know you’re going to solve the problem, but at least you can shine some additional light on it.  Please?

Q:  John Roberts with Platts. 

MR. KEMPE:  Nice to have you back, John. 

Q:  Nice to be here.  It’s a question that actually came out – (audio interference) – the discount rate.  Do you think that the discount rate for capital, for Turkey, and indeed, down the road for Georgia, and for Ukraine, will be affected by the fact that the European energy community is already extending its legislation into Ukraine now that Ukraine is a member of the energy community, Turkey is considering joining the energy community, and Georgia has applied to join it?  So is that going to create the kind of uniform regulation that ought to have an impact on the discount rate?

MR. SACHINIS:  Well, a piece of the problem is also this one – to say, to have the same treaty on transport of energies, just to make an example, and will ease a lot to have all across the region the same – the same regulation.  The fact that you are not totally comfortable with the rules of the game in some of the country for the transit of gas, just to make an example, makes the cost of your discount rate higher, of course, because you have to incorporate a risk in your forecast.  And this is very much the name of game.

My recommendation to the legislator is do not try to reinvent the wheel.  If there is something that is working in other country, just clone it and adapt it to the local situation.  Is not worthwhile that we have a Turkish legislation for transportation of gas compared to the Greek one or the Italian one, or – it – just copy it, is the – (chuckles) – same, and you save a lot of time.  Please do not copy the same error we did.  So beware.  You have to choose the right – the right examples.

MR. KEMPE:  I see you nodding your head in agreement?

MS. SABANCI:  Yeah, yeah, I am in agreement with him, and also, I also completely support the fact that your Eurasia Center can really do something here, on a practical basis, can advise something, as a common –

MR. SACHINIS:  Sometimes there is a sense of pride to say we have to reexamine the problem and to find our way.  Maybe in some cases, it’s worthwhile; in some others, it’s not.

MR. KEMPE:  Do you want to comment on this?  Do you want to go?

MR.    :  No.

MR. KEMPE:  Questions?  Let me turn to one of my own, unless I see someone else coming here.  The National Intelligence Council in its futuristic report, which it does every four years for the U.S. president – and I’ll come back to you in a second – the – and we haven’t mentioned the word “China” yet – (laughter) – said that the biggest impact on the world over the next 20 years is going to be China, though it’s unclear in different parts of the world what the impact will be.  One keeps talking about a power shift, economic power shift of historic dimensions from West to East, but, of course, you’re right in between.  So how does this affect Eurasia?  What’s the impact of the rise of China, India, other things?  How does this affect Eurasia?

MR. QUADRINO:  No, I think that’s an extremely important question.  I think there are short-term and long-term effects here.  On a short-term basis, I mean, I’ll tell you something really simple.  It affects the prices of energy that all of us will pay for.  It affects the prices of LNG because if China starts absorbing more LNG, there’s going to be much more expensive LNG in the rest of the world.  Whether China discovers a lot of shale oil, shale gas, will affect, again, that price.  So they play a balancing role in a lot of the things that are going to be happening in the short-term.

Looking further out, there’s a question whether the world that we’re going to be living in is going to be a multipolar world, an oligopolar world, or a nonpolar world.  And I think the development and the growth of this region, of this set of countries in between, will play a role in how we’re going to end up.  But I think the most important thing that these countries need to think about is that they don’t get squeezed between China and Europe, but instead, that they take advantage of the growth that is possible.  But that’s where you need all the reforms.  That’s where you need the integrity, the transparency, the free flow of capital so that you can create an emerging region with all the benefits that this can have.

MR. KEMPE:  Dinu?

MR. PATRICIU:  Nothing to comment. 

MR. KEMPE:  So in many ways this gets back to what you were saying before, because this area is an emerging region that works more closely together, looks quite different in this new world that one’s forming than a region that’s disintegrated, and China probably makes that all the more – all the more –

MR. PATRICIU:  I say nothing comment because I don’t think China will be the superpower of the future. 

MR. KEMPE:  Yeah.

MR. PATRICIU:  I have a completely other vision about what will happen in China, which suffers of a big disparity between the administration’s system and the Communist philosophy and its application in the – in running the state and the free economy.  These two cannot work together.  And China will pass through a kind of implosion in the next few years or decades.

MR. KEMPE:  That ultimately, there’s going to be a large bump in the road because the logic of its opening and its – (inaudible, cross talk) –

MR. PATRICIU:  Yes, but it will not be a superpower.

MR. KEMPE:  Right.

MS. SABANCI:  But Dinu is – until then – until then, I was in a conference with the MIT guys, and one of the professors said the consumption of China is so relevant to the lives of the Europeans in Belgium, in Holland, or whatever that they cannot realize right now.  It will affect their lives directly. 

But you know, in the later vision what happens to China is another thing, but what happens to the Chinese consumption and Indian consumption is something that we cannot avoid, but really consider.  And that’s why, again, these issues are so international, and it’s so – you know, you cannot think about only one region and try to have a solution for one region.  That’s why we need to have a bigger and wider perspective than only focusing in Black Sea or even Eurasia.

MR. KEMPE:  Did you wish to comment on this?

MR. SACHINIS (?):  Well, we have to face reality.  For a certain while, maybe 10 years of 15 years, China will – China and India and the rest of Asia will compete with Europe and the rest of the world on the raw materials.  And so Eurasia has to take a decision, either East or West, where to go with the gas and oil, and then they produce.  And I think that Europe has to wake up and to make the exact calculation of the need, and to speed up all the processes in order to have its share of the natural resources of the area before it’s too late.

MR. KEMPE:  And I think the – this is a good point.  However China ends up, the impact now is huge, and the impact of whatever problems it might have is also going to be huge.  So please, I see a question here, and if we have a microphone – oh, you’ve got one.  Great. 

(The following question is delivered via translator.)

Q:  Thank you very much.  My question is as follows.  My question is as follows:  In your evaluations, you took into account many factors, but you took one factor for granted, or maybe you forgot one of the factors in your evaluations.  In all these energy games, in energy transport, whatever, you never mentioned the Russia factor.  I think Russia is a very important factor that we need to take into account.  It has the largest natural gas reserves in the world, and it has very significant coal reserves, and it has very significant oil reserves too. 

So on the one hand, we can talk about very significant natural resources that Russia enjoys.  On the other hand, Russia has political links with many countries that you mentioned in this region, Turkmenistan, for instance.  Can you strike an actual gas deal with Turkmenistan without the permission of Russia?  Or even with Azerbaijan, can you really strike such a deal with Azerbaijan without the permission of Russia?  So if we do not include Russia into the rules of the game, I think we cannot really make a comprehensive evaluation.  Thank you.

MR. KEMPE:  (Inaudible, off mike) – we’re down to our last few minutes, so I want to – (inaudible) – two other questions; one here, one here, and then – yeah.

Q:  Okay, thank you.  Jennifer Coolidge, Caspian and Gulf Consultants.  In terms of the discussion that is beginning on Caspian energy to Europe, I’d like to ask you to frame it in this wider perspective.  Again, I acknowledge the last question about bringing Russia into this. 

And could you comment on something that begin – that has just begun?  So in terms of the former relationship of the central Asian states to Russia, they categorically used China as their point of leverage.  Now, what I’ve seen in Turkmen gas deliveries that were supposed to be flowing currently to China and by the end of the year up to an annualized rate of 15 billion cubic meters per year – I have seen for the first time what I believe is the first shift where China is actually – the central Asian states, Turkmenistan in particular – they are actually trying to lever the potential trans-Afghan pipeline and the potential trans-Caspian pipeline against China because their future is currently mortgaged to China.

So could I ask you to comment on, yes, the traditional large powers that the central Asian states have to death with, China and Russia, and what I see as the beginning of a flip in exercising leverage?  Whereas China was always the counterbalance to Russia, now it seems that Europe and a trans-Afghan pipeline, which has come firmly onto the agenda again, whether it is realistic or not, seemed to be the new counterbalances to China.  Thank you. 

MR. KEMPE:  Just a second.  And then one last question, please. 

Q:  (Inaudible, off mike) – I’d like to ask to Dinu Patriciu.  As you know, Turkey, we always said, is going to be energy corridor or – (inaudible) – of this region, especially when you say the corridor is mostly the south of the Turkey because Egyptian pipeline is coming, the Iraq, the Iran, all the – maybe Qatar pipeline maybe in the future. 

But when you say the Black Sea region that you are paying attention especially to their side, what do you think that for economic energy-wise that Turkey might shift their pool from south to the north, when you have a region for a long term?  Do you believing that there is a – (inaudible) – potential in the Black Sea region that you know Turkey might – south to the north?  Because south – mostly the Arabic countries, Middle East and those kind of region, and also Iraq, Turkmenistan, and the Azerbaijan gas.  But what is the benefits of – to Black Sea region that for the future Turkey might go that side?

MR. KEMPE:  And let me just tell you each I – the last three questions are enough for a conference in themselves.  But you each have two minutes, because we’re really running out of time.  But let me start with Dinu and pick out any one of those – any part of those questions you’d like to, and one of them was directly – directed at you. 

MR. PATRICIU:  I think – in fact, I am quite sure that the next two years will bring discoveries in the Black Sea region, discoveries of gas and oil.  And this will shift naturally the interest of Turkey from south to north. 

MR. KEMPE:  A brilliant statement in far less than two minutes.  (Laughter.)  Thank you. 

MR. QUADRINO:  Okay, regarding Russia and China, you know, you can discuss this for hours.  You can discuss this for days.  But in the end, someone has to act, because when you act, when you do something, then you change the balance, and then more things end up happening.  So from our perspective, I think that getting gas from Azerbaijan through Turkey to Europe and through – (inaudible) – to Europe is something possible, it’s something doable and it’s something that can be done now.  So if you can start with that, then the rest of the pieces will start falling into place.  I think in the end, yes, there are going to be politics involved and positioning, but also there is a market here that we’re talking about, and all these pipelines at the end are there to satisfy the market.

MS. SABANCI:  But I just want to comment on the Russia thing.  Thirty-five percent of Europe’s gas come from Russia.  But let’s not forget.  Eighty percent of Russian gas is exported to Europe.  So very much interdependent to each other.  So I am a positivist always, and I believe that the Americans with their shale gas discovery – that will help to ease.  And I hope that Russians will have a more agreeable policies going forward. 

MR. KEMPE:  I’ve never seen so many smiling Polish faces lately, or – about shale gas – (Laughter.)  And I’m aware, of course, a lot of it seems to be (inaudible, cross talk).

MR. SACHINIS:  No, I totally share your point of view, and the question raised on Russia is a very crucial one.  Russia has been, is, and will be a fundamental partner of Europe, and we cannot cope without Russia.  It’s the name of the game.  Russia will try to do its best in order to maintain its dominant position in Europe buying all the gas from Turkmenistan and all the other region and to resell it to Europe.  If we were Russia, we will do the same.  And everybody’s trying to buy gas and to resell the gas and to become – (inaudible) – and so on and so forth.  It’s part of the game. 

What is needed now is to demonstrate that a South Corridor is possible, and it’s possible to open a new route of gas from the Caspian Sea to Europe.  Let’s do this, and then we will see.  The game is open and will be even more open in the future.

MR. KEMPE:  Thank you very much.  In closing, let me just say that this panel embodies what we really dreamed of creating through this forum, which is we have enormously gifted business leaders from Italy, from Greece, from Turkey, from Romania, with the United States left in a mere moderating role.  And so I – we just scraped the surface of issues that we’re going to dig down more deeply into in the next couple of days, and I want to thank you all for being co-chairs of this forum and for this wonderful panel.  Thank you.

MS. SABANCI:  Thank you.  (Applause.)


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