Covid-19: New measures for the petroleum market

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Umut Gurgey

Partner

Istanbul

04 May 2020

Whilst the Covid-19 outbreak continues have implications for a wide range of energy markets including electricity, gas and renewables, its impact on the petroleum market is particularly severe through preventing people and goods from moving around and consequently causing a significant decrease in demand for transport fuels.

As companies and heavy industries were forced to close down or suspend their operations due to social distancing measures, the economic forecasts for businesses operating under petroleum market licences seem gloomy.

In our previous Covid-19 updates, we have discussed the consequences of the outbreak on the regulatory obligations of the petroleum market licence holders, in addition to the electricity and natural gas market licence holders, by referring to the already governed force majeure provisions under the relevant regulations.

As we anticipated in our previous alert, the Ministry of Energy and Natural Resources (Ministry) has now acted and on 29 April 2020 made an announcement (the Announcement) introducing certain measures with respect to the regulatory obligations of the exploration and production licence holders (the Licence Holders) in an attempt to provide temporary relief to the petroleum market players and to ensure the continuing security of energy supply.

In light of the recent steps taken by the Turkish government to reduce the impact of the Covid-19 outbreak, we suggest that Licence Holders continue to monitor the Ministry's announcements closely in anticipation of new measures, in particular where the deadlines of further financial obligations may be subject to postponement.