A David-and-Goliath legal battle between Azerbaijan’s state oil company and a small energy firm is placing Turkey’s legislative system under a spotlight, and is stoking an already existing debate over rule of law in the country.
The dispute centers on a $5.5-billion oil-refinery project spearheaded by the State Oil Company of the Azerbaijani Republic (SOCAR), a critical partner in Turkey’s drive to serve as the energy bridge between the European Union and non-Russian energy producers.
SOCAR expects to invest $20 billion in Turkey overall by 2018. Ankara has said the company’s planned STAR refinery would provide one of the country’s largest sources of foreign direct investment, and would help reduce Turkey’s trade imbalance -- a key weakness in the economy -- by reducing its dependence on imported fuel.
But one key obstacle exists – a Turkish geothermal venture, Buhar Enerji, already holds the rights to the refinery’s chosen construction site not far from the Aegean city of Izmir.
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