ADMINISTRATION COMPANIES IN THE PORTFOLIO 2003 PRIVATIZATION PROGRAMME 1985-2002 IMPLEMENTATIONS PRIVATIZATION SOCIAL SUPPORT PROJECT TURKCE FOR ENGLISH PUBLICATIONS
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TURKISH PETROLEUM REFINERIES CORPORATION

 
COMPANY NAME TUPRAS Turkiye Petrol Rafineleri A.S.
COMPANY ADDRESS Korfez, Kocaeli
COMPANY TEL. / FAX (262) 527 06 21, (262) 527 06 00, Fax : (262) 527 47 23
GENERAL MANAGER Husamettin DANIS
SECTOR Petroleum refining, importing and exporting petroleum products, operating in the field of Petrochemicals.
TAKEN INTO PRIVATIZATION PORTFOLIO Public Participation Administration Decision No 90/3, dated 10 July 1990
CAPITAL (PAID-IN) 250.419,2 Billion TL
SHARE HOLDING STRUCTURE Privatization Administration : 51 %
Publicly Traded Shares : 49 %
NET SALES (31.12.2003) 9,257,998 Billion TL
NET SALES (30.09.2004)  7.904.338 Billion TL
PROFIT / LOSS (31.12.2003) 412,851 Billion TL - (Profit)
 PROFIT / LOSS (30.09.2004)  408.241 Billion TL - (Profit)
NUMBER OF EMPLOYEES 4,332
MARKET SHARE 2003 :71,7%
PRIVATIZATION METHOD  Block sale
SUMMARY OF PRIVATIZATION IMPLEMENTATION

Privatization Administration, announced the tender on 29 April, 2005 to privatize through a block sale by using the sale method Class A shares corresponding to 51% of TÜPRAŞ- Türkiye Ptrol Rafinerileri A.Ş. and the bidding deadline was September 2, 2005. The bidders should meet all the pre qualification criteria given in the Tender Specification which are briefly listed below in order to participate in the tender.

1 The Total Assets of the Participant  must be at least US$ 750.000.000 (sevenhundredfiftymillion).

2. The Shareholder’s Equity of the Participant must be at least US$ 500.000.000 (fivehundredmillion) .

3. The Participant must have direct or indirect experience in the Energy Sector

The participants that were qualified had an opportunity to access to the Data Site which was presented on a web site in order to get information and in order to have the opportunity to determine the existing situation prior to the submission of the bids.

On September 2, 2005 the bidding deadline 9 bids had received from the investors the names of which was listed below and following the one of one meetings, the final bargaining meeting was held on 12 September 2005.

  • OMV Aktiengesellschaft
  • Polski Koncern Naftowy ORLEN SA - ZORLU Holding A.Ş. Ortak Girişim Grubu
  • KOÇ-SHELL Ortak Girişim Grubu
  • ENI S.pA Divisione Refining & Marketing
  • Anadolu Uluslararası Tic. Ve Taş. A.Ş.-Çukurova Holding A.Ş. Ortak Girişim Grubu
  • Indian Oil Corp. Ltd.- Çalık Enerji Sanayii ve Ticaret A.Ş. Ortak Girişim Grubu
  • Ordu Yardımlaşma Kurumu Genel Müdürlüğü
  • Petrol Ofisi A.Ş.-Tüpraş Aqusition Cons. Ortak Girişim Grubu
  • MOL Hungarian Oil and Gas Public Ltd. Co.

At the end of the final bargaining meetings, Koç-Shell Consortium gave the highest bid amounting 4.140.000.000 (fourbilliononehunderedandfourtymillion) USD Dollars. The tender result has been submitted to the Competion Board for approval and after getting the approval from the Board the result will be submitted to Privatization High Council approval.

NOTE:  
 
Subsidiaries (1)
Company

Share %

City

Range of activities

1-DİTAŞ Deniz İşl. Tanker. A.Ş. 79,98 İstanbul Sea transport
DİTAŞ Affiliates
1.İGSAŞ-İstanbul Gübre San. A.Ş.

0.0005

İzmit

Fertilizer

 

General Information

INCORPORATION Under a series of reorganizations of Turkey's state-owned enterprises in 1983, which was aimed at rationalizing their activities and making them more productive, it was decided to bring the country's government-owned refineries under the control of a single entity. On 25 October 1983 at an extraordinary general meeting of İPRAŞ (Istanbul Petroleum Refinery Inc.), which had been in operation since 1961, the Company's articles of incorporation were amended and its name was changed to TÜPRAŞ. (Turkish Petroleum Refineries Corporation). The new company was formally registered and announced on 16 November 1983. Under the new charter, the Izmir and Batman refineries that had previously belonged to Turkiye Petrolleri A.O. and the Kirikkale Refinery (which was then under construction) were turned over to TÜPRAŞ., which was at that time operating the İzmit Refinery that it had built.

.
 TÜPRAŞ IN BRIEF
 Date of incorporation  16 November 1983
 Head Office  Körfez-Kocaeli/Turkey
 Registered capital  TL 500 trillion
 Paid-in capital  TL 250.4 trillion
 2001 Profit (after tax)  TL 188.6 trillion
 Shares offered to public  34.2%
 Refining capacity  27.6 million tons/year
 Petrochemical Production capacity  153 thousand tons/year
 Crude oil storage capacity  2.0 million m3 (gross)
 Storage capacity for oil products    (finished & intermediate)  2.7 million m3 (gross)
Pursuant to decision 2001/54 (5 October 2001) by the Privatization High Council, the Yarımca facilities, the first complex set up by PETKİM Petrokimya Holding A.Ş., was also turned over to TÜPRAŞ. and renamed Korfez Petrochemicals and Refinery Complex. The plants of the complex are currently producing emulsion styrene butadiene rubber (SBR), solution butadiene rubber

(CBR), carbon black (CB), polystyrene (PS), and butadiene-1,3.

REFINING CAPACITY When it was founded, TÜPRAŞ. had a crude oil processing capacity of 17.2 million tons a year. With the completion of the last phase of the İzmir Refinery Debottlenecking Project in 1984, total capacity was increased slightly to 17.6 million tons/year. Investments since then, such as the completion of the Kirikkale Refinery (5.0 million tons/year) in 1986 and the commissioning of an expansion project at the Izmir Refinery in 1987, TÜPRAŞ/s crude oil production capacity reached 27.6 million tons/year. With the total processing capacity of all refineries in Turkey amounting to 32.0 million tons/year, TÜPRAŞ, on its own possesses some 86% of the country's total refinery capacity. The Company is also ideally positioned from the standpoints of infrastructure, location, and logistical support for the importation of crude oil, LPG, and other petroleum products.

PRIVATIZATION On 10 July 1990, the decision was made ordering TÜPRAŞ.'s privatization and the Company's capital was turned over to the Privatization Administration of the Prime Ministry. In 1991 the initial public offering took place and 2.5% of TÜPRAŞ/s "Class A" shares were offered. At the end of 1999, about 3.58% of TÜPRAŞ/s shares was being traded on the Istanbul Stock Exchange while all of the remaining shares were still under the control of the Privatization Administration. With the completion of the second public offering, "Class A" shares, which have been traded on the Istanbul Stock Exchange and the GDRs on the London Stock Exchange, reached to 34.24% of the total capital in April 2000.

CAPITAL Effective 22 November 1990, TÜPRAŞ. switched to the "registered capital" system, a mechanism provided for under Turkish law that streamlines company share capital increases. At an extraordinary general meeting held on 15 October 2001, TÜPRAŞ.'s registered capital ceiling was raised from TL 100 trillion to TL 500 trillion. The new ceiling was announced in the Turkish commercial gazette (issue 5410) on 24 October 2001.

Pursuant to a TÜPRAŞ. board decision on 20 June 2001, the Company's paid-in capital was increased 235% to TL 250.4 trillion, all of which was the result of capitalizing balance-sheet items. Free shares of stock were distributed to existing shareholders in proportion to their existing holdings. This was also announced in the Turkish commercial gazette (issue 5373) on 3 September 2001.

AFFILIATES

DİTAŞ, - Tanker and Marine Operations Corp.

Capital: TL 7,265 billion, TÜPRAŞ.'s share: 79.98%

TÜPRAŞ ranks first among Turkey's five hundred biggest industrial companies. During 2001, the Company repeated the superior performance that it demonstrated in 1999 and 2000.

TÜPRAŞ has the highest petroleum refining capacity in the Balkans and in Eastern Europe. Among all European refining companies, it ranks seventh in size. The Company quickly overcame the effects of the disastrous earthquake of 1999 thanks to accurate business strategies and in 2000 it completed its restructuring, defining for itself a new vision and mission in the process. In the same year, TÜPRAŞ. carried out its second public offering, which went on record as the biggest public offering ever undertaken in this country. As a result of this offering, the Company's shares are now being traded on both the Istanbul and London stock exchanges.

Following a severe liquidity problem that it experienced in November 2000, the Turkish economy was confronted by an even more serious economic crisis in February 2001. The effects of that crisis affected the financial services industry primarily at first but they soon rippled through the real economy in the form of skyrocketing interest rates and large demand for foreign currencies. The system of predetermined movements in exchange rates, which had been the cornerstone of the government's economic stabilization program, was abandoned and replaced by a system of "freefloating" rates.

In the wake of the November and February crises, the Turkish economy entered a period of deep recession, shrinking by some 9.4% overall during 2001. Manufacturing output, the backbone of the national economy, was down by 8.1 %. The total contraction in the industrial sector was around 7.5%. With output falling in the real sector, investment all but ceased. Capacity utilization rates dropped to 70% levels, their lowest in a decade.

The effects of the terrorist attacks on the World Trade Center and Pentagon that took place on September 11th 2001 were not limited to the United States but had political and economic repercussions at the global level as well. Here in our own country, these made themselves felt in a surge in exchange rates, which peaked in the second half of October before stabilizing and slowly subsiding while the ISE-100 index shrank to the 44 cent level during the same month.

While the crises of 2000 and 2001 caused severe losses for both the financial and the real sectors, they also had the effect of forcing the Turkish economy into the most radical and far-reaching process of change in its history. The newly defined strategies and goals aimed at making the national economy more resilient to future crises, at restoring market confidence, and at making economic policies both credible and sustainable.

The single basic reality underlying significant developments that have a direct impact on the world economy and on international politics is acknowledged to be energy sources, specifically crude oil. Energy in general and petroleum in particular head the list of factors that are indispensable for national development and nowadays their strategic importance are increasing with astonishing speed. It was supposed that increased use of natural gas would reduce the demand for fuel oil, but that has not happened. Energy and petroleum consumption still rank high among the criteria of measuring the development level of a country. And as that level rises, so does the dependency on petroleum and natural gas.

In 2001, the total world supply of crude oil amounted to 3.8 billion tons. It is projected that this figure will increase to 4.2 billion tons by 2005 and to 4.7 billion tons by 2010. It is also thought that worldwide consumption will keep pace with this rise in output, increasing by about 1.9% a year between 2001 and 2005, and by about 2.2% a year between 2005 and 2010. As calculated in constant 2000-year dollars, the per-barrel price of Dated Brent is expected to be USD 21.94 in 2005, USD 22.73 in 2010, and USD 25.70 in 2020. Clearly these figures do not portend any astronomically high rises in prices that would lead to the collapse of the global economy.

For TÜPRAŞ, 2001 was a year in which the Company continued to grow on its already solid base. During a year in which the adverse impact of economic crisis plagued every sector, TÜPRAŞ/s superior, uninterrupted, and reliable production performance once more demonstrated that the Company was a driving force of the real economy. In 2001, TÜPRAŞ generated a turnover worth TL 11 quadrillion, providing the national treasury with a total of TL 5.3 quadrillion (about USD 4.3 billion) in taxes and other excises that amounted to about 20% of the government's total revenues for the year.

Shortly after repairing the damage caused by the earthquake and fire of 17 August 1999, TÜPRAŞ had to cope with the consequences of the economic downturn sparked by the financial system crises of November 2000 and February 2001. Despite these however, the Company succeeded in importing 20.4 million tons of crude oil and processing 22.8 tons of crude oil (the additional 2.4 million tons coming from indigenous production) at its refineries during 2001. This represents a year-on-year increase of 7.1% in production and a capacity utilization rate of 82.6%.

In 1999, the year in which the main refinery suffered damage from earthquake and fire, TÜPRAŞ sold a total of 23.5 million tons. In 2000, sales increased to 24.3 million tons, despite the November crisis that year. Sales were again up by about 1.9% reaching 24.8 million tons in 2001 despite negative conditions created by the terrorist attacks of September 11th. In the face of a contracting domestic market for petroleum products in 2001, TÜPRAŞ's market share rose to over 81%.

Responding to depressed domestic demand due to economic crisis and to higher product prices, TÜPRAŞ turned to exports instead, and during 2001 the Company secured foreign currency flow amounting to USD 300 million by exporting 1.9 million tons of oil products. This represents a year-on-year rise of 62% in such earnings.

Product prices did not follow the changes in crude oil prices in international markets, with the result that the Company's profit margins rose or fell accordingly. Furthermore, because Mediterranean market prices are the ones taken into account when the prices of petroleum products in Turkey are determined, TÜPRAŞ's profitability is directly dependent on balances in international markets. During 2001, TÜPRAŞ managed to secure profit margins that were, on average, higher than those of the other Mediterranean refinery complexes-a fact that contributed significantly to the Company's pretax profit of TL 283.5 trillion, despite the year's severe economic conditions, the adverse impact (especially on the aviation and tourism industries) of the September 11 th terrorist attacks, and the need to set aside hefty provisions to cover the Company's exposure to environmental risks. By posting a net profit of TL 188.6 trillion for the year, TÜPRAŞ placed first among all companies in Turkey. An even greater success however was scored in terms of the ratio of operating profits to total earnings. In 1999, only 45% of the Company's earnings were from its operations. That figure increased to 77% in 2000 and to an outstanding 91% in 2001.

TÜPRAŞ. has recently redefined its corporate vision as one of being both the leader of Turkey's energy sector and a world-class refiner. Foremost among the short and medium-term strategies that the Company has identified to make this vision a reality is the issue of increasing the profits that it secures from its core activities and operations. To that end, we have initiated a number of investment projects aimed at improving profitability at our refineries and at increasing capacity utilization rates. Under the Master Investment Plan covering the period of 1989-2004, a total of USD 2.0 billion worth of investments was planned. As of year-end 2001, USD 1.3 billion of these investments were realized and the remaining USD 700 million is currently in progress. The State Planning Organization approved a budget of TL 153 trillion for TÜPRAŞ investments in 2001. Investment expenditures amounted to TL 206 trillion, representing a performance ratio of 135% at a time when investment activities in other industries were unusually depressed.

In all the investments that it plans and carries out, TÜPRAŞ takes the utmost care, devoting as much attention and concern to safety and to environmental and social well-being as it does to the issues of productivity and profit optimization. Our ultimate goal is to conduct all our activities as prescribed by laws and regulations and to produce in compliance with European Union standards while also encouraging environmental awareness.

Well-defined and effectively-implemented business strategies and policies will continue to be the most important guides for TÜPRAŞ's progress along the path of sustainable and profitable growth. The basic elements of TÜPRAŞ's short and medium-term strategies are:

•  Increasing refinery capacity,

•  Reducing costs,

•  Optimizing profits,

•  Producing in compliance with EU standards,

•  Overhauling the organizational structure,

•  Introducing total-quality management systems.

In line with this, the PETKİM Yarımca Complex together with its five operational petrochemical units were taken over by TÜPRAŞ as of 1 November 2001. This marks the beginning of the Company's ability to take advantage of the synergies that are created by the combination of refinery and petrochemical operations. The PETKİM Complex's land is suitable for the construction of a new refinery and preliminary feasibility studies for this project have already begun.

Turning now to the new year, during 2002 TÜPRAŞ plans to process 23 million tons of crude oil and produce 25 million tons of products (including those targeted for export). These activities are expected to generate gross receipts of about TL 21 quadrillion (USD 12 billion), not including VAT. Between now and the end of 2004, the Company plans to undertake investments worth a total of USD 700 million, excluding the figures for the new refinery investment.

 

 

aatik@oib.gov.tr

 

Republic Of Turkey Prime Ministry Privatization Administration 2003