Petroleum Market Law numbered 5015 (“the New Law”), as determined in its justification, has been enacted by Grand National Assembly of Turkey (“GNAT”) at December 4, 2003 within the efforts performed to institutionalize the market economy and improve the competitive environment in order to update the current legal regulations in the petroleum and petroleum product industry in absolute coherence, regulate the markets within such approach and meet the requirements accordingly.
1- Regulative Authority
The New Law, for the determination, observance and inspection of the petroleum market and fulfillment of duties, has authorized the Energy Market Regulatory Authority (“the Authority”).
The Authority is informed of the privatization transactions regarding petroleum market. The Authority reserves the right to grant new license as a result of the privatization transactions in line with the current legislation or to amend such licenses without another transaction necessary to be performed.
b) Fundamental Duties of the Authority and the Board Regarding Petroleum Market Activities:
Transactions such as granting licenses in line with the New Law, updating, inactivating or cancelling such licenses are carried out by the Authority.
2- Obligation to Obtain License and Fundamental Rights and Obligations of License Holders
It is mandatory to obtain a license to perform below stated activities regarding petroleum market;
- Refining, processing, mineral oil producing, storing, transporting, performing free user activities and building and/or operating a plant for such purposes;
- Distributing and transporting fuel products and performing dealer activities.
The Authority, related to delivering and processing activities, may designate exceptions to the obligations of acquiring license in line with the principles and measures that he will apply. The Authority does not grant license over undertakings.
Following the license application, the Authority shall make its resolution regarding such application in 60 days. If the application is denied, the Authority informs the application holder of the denial justifications.
All institutions that operate market activities within their acquired licenses are subject to the provisions of the Turkish Commercial Code. The companies operating in the market, that reserve the equity company status according to the foreign country legislation, are deemed to be settled in Turkey in accordance with the provisions of the Law on the Protection of the Value of Turkish Currency in terms of their activities performed in Turkey.
3- Ownership and Expropriation
Acquiring ownership and rights of land, premises and buildings necessary for the facilities in line with the New Law by way of prior agreement execution constitutes the basis. However, it is also possible to adopt the expropriation procedure within the conditions stated in Expropriation Act in case specific facilities cannot be acquired by way of concluding an agreement. The resolution of expropriation settled by the Authority is deemed to be a public interest resolution. Such facilities are:
- refinery facilities and licensed storages,
- to constitute an easement right on the immovable properties such as lands and building plots that are located within the delivery lines and other buildings and immovable that are integral parts of such immovable properties,
- delivery facilities that are designated by the Authority.
On the contrary to the determination of the Former Law which used to enable petroleum right owners to prefer among one of the methods of concluding an agreement or expropriation, the New Law determines expropriation as the last resort for the land, building plots and buildings needed to build petroleum facilities on. The Treasury reserves the ownership right of the expropriated immovable and usage right of such immovable belongs to the license holder which has paid the expropriation fee. The usage right is registered to the Land Registry under the title of the license holder and such determinations become valid during the license period. In case the license period is over or the license is cancelled, expropriation fee paid by the license holder is not returned.
An annotation is registered to the Land Registry records of the facilities of refining and delivery license holders that no disposal can be registered unless the consent of the Authority is granted.
4- Import and Its Execution Conditions
It is mandatory for the ones to acquire at least one of refining, distributing or bunkering license to import crude oil or fuel products. Import of crude oil and fuel products are executed by competent customs that are capable of performing specific measurements. Fuel product import is limited with the products that are stated under the sub title of the related license and such import can only be executed after the Authority is informed of the marketing projection and dealer information. All activities including import and export related to petroleum products other than fuel products (solvent, mineral oil, base oil, asphalt, solvent naphtha etc.) are performed according to the determinations designated by the Authority.
Following the revocation of the decree of the council of ministers’ numbered 98/10745, 40% of import limitation is removed and free import activities may be performed as of the date of the mentioned decree.