Interview with Murat LeCompte - SOCAR

We conducted an engaging interview with Murat LeCompte, Corporate Communications Director of SOCAR Türkiye, on the company's national and international strength, areas of activity and objectives for the coming years. Mr. LeCompte also answered our questions regarding the importance of technology for SOCAR Türkiye and sustainable energy use.

Could you tell us about yourself and your professional background?

I was born in Istanbul in 1964. After graduating from TED Ankara Kolleji, I completed my associate degree at Boğaziçi University in the Tourism Management Department. I completed my undergraduate degree in business administration at the University of Houston. My professional career has focused on the energy and technology industries. For approximately 16 years, I worked in the information technology sector in both the United States and Turkey in the areas of professional services, customer support, sales, consulting and product development. At Intel Corporation, I held positions including Director of Strategic Relations and Business Development, Director of National Education Projects, and Director of Public Relations. Between 2006 and 2017, I worked at BP Türkiye first as Communications and External Relations Manager and subsequently as Director of Corporate Communications. Most recently, as of June 2017, I have served as Corporate Communications Director of SOCAR Türkiye.

SOCAR's history doubtless goes back a long way. Could you tell our readers this success story from that time to the present?

In 1991, the Republic of Azerbaijan declared independence. Through a presidential decree issued on 13 September 1992, the former Ministry of Oil and Gas, along with all its production units, enterprises and scientific research institutions, were consolidated into a single structure named the Azerbaijan State Oil Company, or SOCAR. Two years later, in 1994, a Joint Development and Production Sharing Agreement was concluded with 11 international oil companies from 7 countries covering the Azeri, Chirag and Gunashli fields. From that point forward, a new period began in bringing Azerbaijan's oil and natural gas resources into the economy. Referred to as the "Contract of the Century," this process subsequently involved 41 oil companies from 19 countries, and approximately 32 agreements were signed. The "Contract of the Century" represented a major step in the extraction, development and export of Azerbaijan's oil and natural gas reserves. From 1997, when initial production began in these fields, to the present, approximately 500 million tonnes have been produced, and over the past 25 years, 743.3 million tonnes of oil have been produced nationally. The commissioning of the subsequent Baku-Novorossiysk and Baku-Supsa pipelines, the discovery of the Shahdeniz field in 1999, the Baku-Tbilisi-Ceyhan (BTC) Oil Pipeline, the Baku-Tbilisi-Erzurum natural gas pipeline, and the purchase of Petkim from the privatization tender were important turning points in the history of Azerbaijan and SOCAR. Today, SOCAR has representation in 13 different countries and operates international trading companies in Singapore, Vietnam, Nigeria and Switzerland. Other countries where SOCAR has established an active presence include Georgia, Ukraine, Romania, Switzerland and Austria, in addition to Turkey.

Could you discuss the source of SOCAR's international strength? What is the significance of SOCAR Türkiye to SOCAR Global?

The discovery, processing and international presentation of Azerbaijan's rich oil and gas reserves, combined with SOCAR's competent human resources and vision, constitute our greatest strength. Successful projects undertaken with global companies have made a significant contribution to the country's development, and today we are among the market's effective players operating commercially at over 100 sales stations in 40 countries. Undoubtedly, SOCAR's transformation into a group producing high value-added products has also been instrumental in this process. Today, SOCAR, as an integrated energy company offering integrated solutions, is a strong international player not only in exploration, production, processing and distribution of oil and natural gas, but also in petrochemical products. Particularly through major projects implemented in Turkey in the natural gas pipeline, petrochemistry and refining sectors, SOCAR has drawn international attention and, through these investments, has helped Turkey become an important force on international energy platforms.

Could you describe the areas in which you operate under the SOCAR brand in Turkey? What value have your investments in this sector added to your brand and Turkey?

SOCAR Türkiye is today Turkey's largest direct foreign investor. Having entered Turkey in 2008 with the purchase of Petkim from the Privatization Administration for USD 2.04 billion, we have implemented the STAR Refinery with an investment of USD 6.3 billion, TANAP with USD 6.5 billion, SOCAR Terminal, Petkim RES, SOCAR Distribution and SOCAR Storage projects. Through a purchase process completed in June of this year, we also acquired Bursagaz, Kayserigaz, EWE Enerji, Enervis and Millenicom. Our group, which has so far invested over USD 15 billion in Turkey, aims to bring this figure to USD 19.5 billion levels in the short term. This represents Azerbaijan's largest-scale investment in a single country to date. Our investments make an important contribution to Turkey's economy, energy sector and employment. For example, the STAR Refinery will reduce Turkey's current account deficit by USD 1.5 billion annually.

What is the importance of technology for SOCAR Türkiye? Could you discuss the technology and applications you use in carrying out your work?

In our age of digital revolution, as a group bringing major projects to life, we have taken very important steps in this direction as well. 2018 was a pivotal year for us in terms of digitalization and we implemented numerous information technology projects that guided digital transformation. Both in business and industrial platforms, we accelerated efforts aimed at increasing cyber security maturity levels in the areas of process, organization and technology. We completed alignment work with national and international quality standards regarding information security. During this period, the projects we implemented at the STAR Refinery, built with cutting-edge technology, and at Petkim, Turkey's first and only integrated petrochemical facility, added tremendous value to our companies. At Petkim, we began using advanced analytics applications and artificial intelligence in production. Thanks to these steps, instead of the furnace operation scenarios previously conducted once per week, we can now generate 54 billion scenarios every 15 minutes. From all of these, the most suitable and efficient scenario for Petkim is selected and implemented. The benefits of these projects are concretely reflected in financial results. Technology investments had a major impact on the record production figures achieved at Petkim this year. We continue our efforts in this area across all of SOCAR Türkiye with the goal of becoming Turkey's most digital company.

You have employees working in high-risk operations. In this context, could you convey to our readers the safety measures you take for your employees?

SOCAR Türkiye, in order to manage occupational health, safety and environment (OHS&E) practices in a systematic and consistent manner, established an OHS&E Management System named SAFE (SOCAR Aims For Efficiency). Our OHS&E Management System reflects the corporate OHS&E vision of SOCAR Türkiye, demonstrating that all OHS&E activities are integrated with the company's efficient and sustainable development, and contains fundamental principles serving as the basis for strong OHS&E management practices across SOCAR Türkiye group companies. SAFE, within the scope of SOCAR Türkiye's corporate OHS&E Policy, offers a structural approach for all SOCAR Türkiye affiliates in planning, implementing, monitoring and improving OHS&E management in their activities and in achieving OHS&E objectives, and serves as a renewable tool for this purpose. SOCAR Türkiye possesses a culture that adopts best industry OHS&E practices, and occupational health and safety are regarded as "work competency." The health and safety of all our company personnel, as well as our contractor workers and stakeholders, are of vital importance to us. OHS&E risks are systematically evaluated and managed for all SOCAR Türkiye activities. Responsibilities regarding the performance, distribution and updating of risk assessments are clearly specified in operational plans. Such work is carried out by competent individuals who have received training in this field. The results of risk assessments and corrective and preventive actions are identified and documented. Priorities are set against activities involving high OHS&E risk and action plans are developed accordingly. While commitment to OHS&E principles is required for working at our companies, everyone working for SOCAR Türkiye, regardless of position and seniority, is responsible for OHS&E policies. As a group, in addition to system investments to minimize human resources risk, we provide regular training to our employees. In the meantime, through investments in information technology, we are taking steps toward eliminating risks.

How do you define your social responsibility awareness? Do you have social responsibility projects in which you actively participate?

SOCAR Türkiye has social responsibility projects, particularly in the fields of education and sports. Wherever we are located, we aim to leave a mark on the community at every point we reach. In addition to the schools we have built in Aliağa, we have an entrepreneurship project involving high school students in Aliağa and Izmir. Our project, a first at the high school level in Turkey, involved 650 students with 33 projects last year; the project will continue this year with an increased number of schools. The sponsorship of Petkim for the Turkish Disabled Sports Federation BOCCIA National Team is also very valuable to us. One of the finest examples of social responsibility is TANAP. In 20 provinces, 67 districts and 600 villages along the project route, we have implemented 1,108 projects from which 20,115 children, 6,909 women and 4,310 disabled individuals have directly benefited to date. Today, when TANAP is mentioned, it is recalled not only as a pipeline meeting an important portion of Turkey's gas needs and bringing Azerbaijani gas to Europe's doorstep, but also as a project that touches people, nature and history at every point it reaches. In carrying out social responsibility projects as SOCAR Türkiye, we work with the goal of ensuring that our employees actively participate in the projects. As a natural process, my team and I have worked intensively to strengthen these projects and reach more people and locations.

Could you describe your work in achieving more effective and sustainable energy use?

With the conviction that Turkey's renewable energy potential should be utilized as efficiently as possible, we have also undertaken important investments. In this context, we commissioned the 51 megawatt capacity Petkim Wind Energy Power Plant (RES) in 2018. Petkim RES, which has begun contributing to Turkey's renewable energy capacity and carbon emissions reduction, increased the electricity generation capacity of Petkim's cogeneration facility by approximately 23 percent. At Petkim RES, constructed with an investment of approximately EUR 55 million, 17 wind turbine generators have an annual electricity generation capacity of approximately 200 gigawatt hours. In sustainable energy, efficient use of resources and production with advanced technology creates significant value.

Could you describe the training and programs SOCAR implements for the personal and professional development of your employees?

As a company, we view all our employees as potential leaders and shape their training accordingly. We try to highlight characteristics of all our employees such as commitment to the company, building trust with superiors and subordinates, and the ability to make quick decisions in the face of change. For this purpose, we have created a "Lead Together" program. Here we try to teach all our employees to prioritize team success over individual success and to prioritize the dynamics of our company. In addition, we have numerous personal development-supporting trainings and hobby courses aimed at ensuring SOCAR Türkiye's productivity.

Could you provide information about your objectives for the coming years? In this age of rapid technological advancement, what innovations and developments do you foresee in the petrochemical sector?

SOCAR Türkiye, with total investments in Turkey reaching USD 19.5 billion, has an initial public offering project in the coming years. In this sense, an intensive process awaits us. Meanwhile, the USD 600 million additional investment project, for which the foundation was laid in recent months and which will increase STAR Refinery's storage capacity from 1.6 million cubic meters to 2.5 million cubic meters, is continuing. Another investment exciting us for the coming period is a new petrochemical facility we plan to implement in joint venture with another company in Aliağa, Izmir. This investment, like other projects, will have strategic importance. With the facility becoming operational, Turkey's pure Terephthalic Acid (PTA) imports are expected to be completely eliminated. Site work for the project, which is expected to cost USD 1.8 billion, will begin in 2020.