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Viewing cable 04ISTANBUL262, BOSPHORUS DELAYS EASE BUT ISSUES REMAIN

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Reference ID Created Released Classification Origin
04ISTANBUL262 2004-02-20 11:26 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Istanbul
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 ISTANBUL 000262 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR E, EB, CBED, EB/IFD AND EUR/SE 
DEPARTMENT PASS POIC, NSC FOR BRYZA 
USDOC FOR 4212/ITA/MAC/OEURA/CPD/DDEFALCO 
USDOE FOR CHARLES WASHINGTON 
TREASURY FOR OASIA - MILLS AND LEICHTER 
 
 
E.O. 12958: N/A 
TAGS: ENRG EINV ECON PREL SENV EWWT TU
SUBJECT: BOSPHORUS DELAYS EASE BUT ISSUES REMAIN 
 
REF: A. 2003 ANKARA 7113 
     B. 2003 ANKARA 3399 
 
 
 1. (U) Sensitive but unclassified.  Not for internet 
distribution. 
 
 
2. (SBU) Summary: Shipping delays on the Bosphorus and 
Dardanelles straits have eased in recent days but the war of 
words surrounding the issue continues.  Russia's oil pipeline 
monopoly Transneft strongly criticized Turkish administration 
of the waterways earlier this week, and indicated that it is 
considering building a pipeline across Thrace that will 
bypass the problem.  For their part, Turkish officials 
strongly defend themselves, ascribing the problems to this 
winter's unusually bad weather (in the most recent storm last 
week four ships sank or ran aground in the approaches to the 
two straits) and to the doubling of oil exports via tanker 
from the Black Sea over the past seven years.  Both 
government and industry sources stress that the new VTS 
system is not a panacea and that traffic is at or near 
capacity.  End Summary. 
 
 
3. (SBU) Winter of Discontent: Recent months have constituted 
a winter of discontent for oil shippers using the Bosphorus 
and Dardanelles.  By some accounts, delays have averaged 20 
days for tankers to transit the two straits, with the longest 
waits in the approaches to the longer Dardanelles. 
Chevron/Texaco advisor Captain Kjell Ljandin told Embassy 
econoff that the worst moment occurred earlier this month 
when 42 ships were waiting in the Marmara Sea to pass  south 
through the Dardanelles.  With tanker rates in the 
Mediterranean at extremely high levels, the delays have 
translated into extra costs of 700,000 USD or more per 
shipment.  According to Transneft officials, they have also 
led to serious backups at Russia's Novorossisk oil terminal. 
Alper Aral, a manager at Ditas, the oil shipper owned by 
Turkish refinery Tupras, told us that because the delays 
cannot be predicted in advance, they have upset supply 
schedules and put upward pressure on already high tanker 
rates in the Mediterranean.  The problem does not affect 
Ditas' shipments to Tupras' Izmit refinery on the sea of 
Marmara, he said, since such shipments can "jump the queue," 
but does affect shipments to refineries in Izmir.  Aral 
added, however, that blaming delays solely on the straits is 
misleading, in that the Russian port is often closed by bad 
weather as well.  Nonetheless, the Bosphorus delays do impose 
a significant cost on shippers, and according to Cem Koksal, 
the  Chief Financial Officer of the Zorlu Group, the Turkish 
partner in Tatneft's winning bid for Tupras, the ability to 
avoid them provided an additional incentive for the Russian 
oil company's decision to bid on the Turkish refiner. 
 
 
4. (SBU) Running at capacity: In press comments, Transneft 
officials have suggested that in addition to technical issues 
leading to shipping backlogs there are "political issues" as 
well, a charge strongly disputed by Turkish authorities. 
Instead, they point to the increase in oil volumes shipped 
over the last decadeto what they describe as the straits' 
capacity.  Official figures document the dramatic increase. 
he amount rose from 124 million tons in 2002 to 13 million 
tons in 2003.  Most tellingly, the lattr total is more than 
twice 1997's total of 60 milion tons.  With these volumes, 
both government and industry sources describe the recent bad 
weather in European Turkey as he "sraw tht broke the 
camel's back."  Indeed, n the most recent storm on February 
13-15, four ships sank or ran agroundin the approaches to 
th Bosphorus and Dardanelles, with the loss of 20 Cabodian 
and Bulgarian seamen. 
 
 
5. (SBU) Necessary Balance: Maritime Deput Undersecretary 
Sitki Ustaoglu stressed to Embasy econoffs tht evenwhen 
the new Vessel Traffic Syste (VTS)for te strats is fully 
operational it wa turne over o Turkey on a provisional 
bsis at the beginning of the year, though some unspcified 
problems remain that should be resolved by April), it will 
not solve the problem of shipping delays.  This point was 
echoed in Istanbul by Turkish Maritime Pilots Association 
(TKKD) Secretary General Cavit Istikbal, who argues that if 
the system is used to implement vessel spacing requirements, 
which heretofore have often been observed mostly in the 
breach, traffic could decline rather than increase.  (In the 
past, according to MFA officials, shippers often bribed 
straits officials to get around the transit rules, but now 
with electronic management this is no longer possible.)  In 
Istikbal's view, while the new system provides a useful 
documentary record of incidents that occur, it does not 
materially change the vessel transit system that has been in 
place since 1994, and so will not lead to increased traffic. 
 
 
6. (SBU) Upgrades: Istikbal said that planned implementation 
of an automatic ship reporting system may permit some 
increase in volume, since Maritime authorities will know 
sooner about approaching ships and will be better able to 
organize them.  But Ustaoglu noted that such organization may 
also require some unspecified changes in existing legislation 
and will not be implemented in the near future.  In essence, 
Istikbal described the current system as a delicate balancing 
act between safety requirements and traffic facilitation, in 
that the daylight and one-way traffic requirements for large 
(200 meter) tankers inevitably limit volumes (only six such 
tankers can be accommodated each day on the Bosphorus; the 
limit was raised to 7-8 on the Dardanelles at the end of 
January), but reflect a reasonable tradeoff since any 
accident in the straits could interrupt traffic for a 
protracted period.  Similarly, though Montreaux does not 
allow Turkey to require use of tugboats, Turkey has been able 
to encourage their use by allowing only one large tanker 
through a day without a tug.  The costs of waiting far 
outstrip the modest cost of the tug, so most large vessels 
acquiesce and employ one. 
 
 
7. (SBU) Bypass pipelines: The delays in the straits have led 
to renewed interest in pipeline projects to bypass them, 
especially since in most experts' view the Baku-Tblisi-Ceyhan 
pipeline will only provide limited relief when it comes 
online next year (Istikbal estimated that BTC would only 
replace one of the six large tankers that transit the straits 
each day, and that new production would swiftly replace it). 
In press comments this week, Transneft indicated its interest 
in a pipeline across Thrace that would enable it to avoid 
both straits.  A source close to the Thrace bypass told us 
that the rising cost to shippers (delays and insurance) has 
convinced several oil companies that the Thrace bypass is an 
economically viable/cost effective alternative.  Zorlu's 
Koksal judged that the most currently feasible project would 
take oil to the Tupras refinery in Izmit from a point on 
Turkey's Black Sea coast.  He noted that this route could be 
built for a relative pittance (150 million USD), and would 
mostly parallel existing natural gas pipelines, so would have 
less right-of-way difficulties. 
 
 
8. (SBU) Comment: Turkish maritime officials have told the 
Embassy that they are preparing a paper for the International 
Maritime Organization (IMO) on the straits, to follow up on 
their response last year to Russia's complaints (ref b). 
They stress, however, that they have no plans to change the 
Montreaux convention and that while legislative changes are 
planned, this will take time so that "no quick fixes" are in 
the works.  From the perspective of our Istanbul contacts, 
Turkey's measures to safeguard the straits strike a proper 
balance between Turkey's responsibilities under the 
convention and its responsibilities to its citizens, 
particularly given the impact an accident would have on the 
city and its inhabitants.  End Comment. 
ARNETT