Turkey and Venezuela Close to Oil for Homes Barter System

According to Mithat Cansiz, president of the Turkish Petroleum International Co Ltd (TPIC), Turkey is on the verge of agreeing a bartering arrangement with Venezuela. TPIC is an affiliate of the Turkish Petroleum Corporation (TPAO) which is run by the state.

This innovative agreement would allow Turkish firms to construct infrastructure and housing in Venezuela, and in return Turkey would receive access to petroleum resources within the country. Talks, co-ordinated by the Energy and Natural Resources Ministry, have been ongoing between the two countries over the last year, and it is likely the agreement will be signed within the next few weeks. The agreement has already gained the support of high-ranking officials, and if signed would see $1 billion worth of petroleum goods being exchanged for infrastructure and housing construction by Turkish businessman during the next five years.

The agreement could be very beneficial for Turkish petroleum firms, and the earnings will be kept in an account which would provide financing for the construction projects. If the project proves to be successful, then Turkey could look at implementing similar strategies with other petroleum rich countries, most likely in Africa.

In March 2010 a similar agreement was signed by TPAO to provide drilling services for wells in the Basra region of Iraq. The arrangement is proving to be very profitable, and TPAO is hoping to become one of the top drilling firms in the Middle East region. Last year Turkey exported $84.2 million worth of services and goods to Venezuela, and imported $153.2 million worth of goods.