Istanbul (Platts)--27Jul2007

The US ambassador to Turkey, Ross Wilson, Friday strongly criticized
Turkey's agreement with Iran to allow the transit of Iranian gas to Europe via
Turkey and the transit of Turkmen gas to Europe via Iran and Turkey. 

     In remarks published on the US Ankara embassy website, Wilson said that
the US was opposed to the agreement for two reasons, firstly the effect it
might have on the development of other gas reserves in the Caspian basin and
secondly for the fact that it might undermine UN efforts to rein in Iran's
nuclear ambitions.

     Pointing out that the US and Turkey have been working together for a
decade on developing Caspian oil and gas resources and the pipeline
infrastructure to bring them to market, Wilson said that the deal with Iran
might affect the development of gas resources in other countries in the region
and attempts to bring them to market.

     "A major increase of Iranian gas exports to Turkey and beyond may hinder
the development of gas resources in Azerbaijan, Kazakhstan and western
Turkmenistan that might come to Turkey," he said. He added that Turkey's
continued support for the Trans-Caspian gas pipeline was vital. 

     Wilson also said that Turkey's agreement with Iran "could undermine the
efforts of UN Security Council member countries--and many others, including
Turkey--to persuade Iran to comply with its Non-Proliferation Treaty
commitments, pursue full transparency with the International Atomic Energy
Agency, and abandon its apparent pursuit of nuclear weapons."

     Accepting that the UN sanctions regime against Iran does not cover energy
trade or investment in Iran, Wilson pointed out that widespread concern over
Iran's policies had meant that no major new oil and gas investments or
projects with private companies or countries have been realized since 2004.

     "This reflects widespread concern about the Iran nuclear crisis and
caution in increasing dependence on an unreliable energy supplier that is
isolating itself from the international community," he said.

     He added that while he realized Turkey would take its own decisions
concerning its energy future, the US was confident that it would "take these
and other relevant factors into account as it goes forward."