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CapabilityStatementEnergy, Utilities & MiningIndustries in Turkey

PwC Turkey Capabilities 6.4v2 6/4/11 14:24

IntroductionThe Turkish energy, utilities and mining landscape is changingdramatically. Market liberalisation is moving forward apace. Turkeyhas successfully privatised its regional power distribution networks.The privatisation of state generation assets is expected to start soon.The former state refining company (Tüpraç) has already beenprivatised and the retail fuel sector is being deregulated. Intenseconsolidation activity is taking place in the already highly competitivedownstream environment to compensate for the erosion of margins.

Energy demand has grown stronglyin Turkey in recent years. This isputting great pressure on thecountry’s existing infrastructure andmaking significant investments innew generating capacity necessary.There is little domestic oil or gasproduction relative to consumptionneeds and so the country reliesheavily on imports. Reducing thisdependence is one of the majorobjectives of the government,reflected in the plans to buildTurkey’s first nuclear power plantand to expand renewable energysupplies.

Securing supply is also a major globalconcern. The country plays anincreasingly important role in thetransit of oil and gas supplies toEurope from Russia, the Caspianregion and the Middle East. Turkey’spolicy aims also to make the country areliable connection route and hub inthe region. On the regulatory side, thenewly introduced Turkish CommercialCode means a convergence withInternational Financial ReportingStandards (IFRS) with far-reachingconsequences for energy companies.

PwC works with companies andindustry stakeholders all over Turkey toassist with the decisions, planning andimplementation of these and otherchanges. We have been involved inmany of the major developments thatare shaping the Turkish energy, utilitiesand mining industries, includinglandmark deals, privatisations,company restructuring, assuring thefirst sustainability report in Turkey andexamining future options forharnessing renewable energy.

This statement of our capabilities isintended to give you insight into ourexperience and the ways we can worktogether to get you further ahead.Always, our goal is to understand yourneeds and add value from ourknowledge and expertise.

Faruk Sabuncu PwC Turkey Energy, Utilities & Mining Leader

2 Energy, Utilities & Mining Industries in Turkey Capability Statement

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Energy, Utilities & Mining Industries in Turkey Capability Statement 3

Making the most out of the liberalised Turkish 4 electricity market

Complying with regulatory and reporting 6 requirements

Managing capital projects and infrastructure 8

Improving performance and operational 10 effectiveness

Addressing sustainability issues 12

Our response to your challenges Today’s energy, utilities and mining companies in Turkey haveto manage tomorrow’s market uncertainties. Where aredemand and supply trends taking us? What will be the impactof changing regulatory requirements? Will technologicalbreakthroughs change the fuel mix metrics? How will risingenergy costs affect companies and their performance?Sustainable value creation is taking many different routes ascompanies evolve their strategies to meet changing marketdemands. PwC can help your company or organisation in manydifferent ways.

On the following pages we summarise how our services can helpspecifically with the following key challenges of the Turkishenergy market:


Making the most out of the liberalisedTurkish electricity market Liberalisation is creating a sea change in culture, operationsand investment mindset in the utilities sector. The processkicked off at the beginning of the last decade and, since then,the resulting privatisations have put the Turkish utilities dealenvironment on international investors’ agendas. Turkeysuccessfully privatised its regional power distribution networks.This round of privatisations raised more than US$15.8 billionand was completed in less than three years. This success is likelyto spur the government to begin the privatisation of generationassets, where private investment in existing and new capacity isneeded as Turkey’s demand growth is threatening to outstrip supply.

The pattern of ownership in the sector ischanging. Liberalisation offers excellentopportunities for new market entrants.Non-energy companies and financialinvestment institutions are entering theTurkish energy space to reinforce theirinfrastructure presence and profit fromthe rapidly growing market. But as theTurkish electricity market becomes moredynamic, routes to growth become morecomplex with added risk anduncertainty, especially for the newmarket players. Companies need to drawon the very best market modelling,trading, customer relations andmarketing practice to make the most oftheir organic growth potential.

How PwC can help you:

We help you do better deals and createvalue through mergers, acquisitions,disposals and restructuring. We worktogether with you to develop the rightstrategy before the deal, execute dealsseamlessly, identify issues and points ofnegotiation and value, and implementchanges to deliver synergies andimprovements after the deal.

• Identifying deal value: Maximising the value that can be captured from deals is crucial. PwC can find the targets, analyse the strengths and weaknesses, perform financial and operational due diligence, identify synergies and potential improvement opportunities, negotiate terms, access capital markets and other sources of finance, manage the post-deal integration process, carve out non-core assets, and make changes to realise improvements in long-term performance.

• Getting the right deal structure:We help clients to identify the principalconcerns that will determine the rightstructure for a transaction. PwC canassist with marshalling the complexrange of factors, including tax, legal,accounting and regulatory issues, thatwill need to be considered together. Wecreate a feasibility plan to assess thechosen structure and, once this isconfirmed as the right choice, we willprovide continuous support throughoutimplementation.

• Tax merger and acquisition services:Many merger synergies require the exploration of tax-related opportunities and protection against tax-related risks. We can help you:

• address key issues and identify opportunities during due diligence

• create a flexible global structure • identify statutory deadlines and

current period filing requirements • re-evaluate the global tax strategy

implications of the deal • achieve an optimal long-term global

effective tax rate • reduce costs and contribute to overall

synergy goals • evaluate and optimise tax department

structure, resources, processes and systems.

• Getting the right structure for JVs and strategic alliances: Joint ventures (JVs) and strategic alliances are likely to become increasingly important as utilitiestake up the challenge of delivering initiatives such as major nuclear and renewable energy programmes. PwC can help with a detailed examination of risks and how the structure can reflect the factthat different parties will be contributing different components to a JV. For example, a company providing technology to the venture is in a very different situation from one signing an off-take arrangement and taking mark-to-market risks. Shareholders may have different appetites for, and capability to, manage exposures. With our help, your JV can get off on a strong platform.


The total value of deals in the energy sector between 2007-2010 was US$25.1bn

PwC Turkey advised companies during the privatisation process on evaluation, financial and tax due diligence, PPA

The deals we were involved in are worth US$11.5bn

US$25.1bn

Source: PwC

US$11.5bn



Working together: electricitydistribution privatisation

“The share of the private sector in theenergy field has increased to 52% from34% over the last eight years”

We advised the joint venture (JV)between one of the biggest industry andfinancial groups in Turkey and aEuropean energy company on theauction process for Turkey’s electricitydistribution sector privatisation.

DeliverablesPwC was the financial advisor to the JV,conducted the financial and tax duediligence, and assisted around thepurchase price allocation. The JV won theoperating rights of one of Turkey’s largestdistribution companies, supplying power toaround three million customers andaccounting for approximately 9% ofTurkey’s total electricity demand.

Energy Minister Taner Yildiz, 30th general meeting of Turkey’sInternational Investors Association(YASED) on 24 February 2011



Complying with regulatory andreporting requirementsTurkish energy company activities are affected not just byindustry, financial reporting, tax audits and competitionregulation but also, increasingly, by financial and commoditymarket regulation. The compliance landscape is ever-changingand the volatility and complexity of energy markets themselvescan sometimes be the focus for regulatory attention. The marketstructure is constantly evolving. On the financial reportingfront, the newly introduced Turkish Commercial Code means aconvergence with International Financial Reporting Standards(IFRS) with far-reaching implications for companies.

The New Turkish Commercial Code willradically change commercial life inTurkey. It introduces significantregulations for all capital stockcompanies regarding good qualitymanagement and internal andindependent audit. Corporategovernance is the dominant concept. Itwill assure the financial market withconfidence and enhance sustainabledevelopment of the Turkish enterprises.

The Energy Market Regulatory Authority(EMRA) is keeping a close eye on sectoractivity. Companies need to pay attentionto the structure of merger andacquisition deals and will need to ensurethat their ownership and legal structuresare sustainable in a changing regulatorycontext. Perhaps more than in any otherindustry, how Turkish energy, utility andmining companies shape and respond tothe regulatory environment determinesthe value they can return to shareholdersor other stakeholders. Companies have arole to play in shaping that evolutionalongside policy makers.


• Advice and assistance on the New Turkish Commercial Code, including compliance check-up, training, roadmap and conversion assistance.

• Independent auditing services for financial statements pursuant to the relevant audit standards, prepared in accordance with International Financial Reporting Standards (IFRS), generally accepted accounting principles in the USA (US GAAP) or issued by the Capital Markets Board (CMB), and reporting requirements of the Energy Market Regulatory Authority (EMRA).

• Tax audits: tax certification and other sworn financial advisory services.

• Technical assistance and advice for the preparation of financial statements in compliance with principles according to IFRS, US GAAP and the CMB, and reporting requirements of EMRA.

• Systems and Process Assurance provides services related to controls around the financial reporting process, such as Data Assurance (analysis and assurance over the consistency and integrity of business data), Internal Controls (management assess, remediation and optimisation of internal controls over reporting systems and business processes), ERP Assurance (assurance on ERP systems and improvement of their reliability and functionality at implementation, migration, upgrades and operation), Internal Audit (assistance to improve quality and effectiveness of internal auditprocesses).

• Global compliance services: preparing and reviewing tax returns and computations, negotiating with tax authorities, corporate income tax compliance, corporate governance compliance, indirect tax compliance, accounting services, payroll services and corporate secretarial services.

• Optimising rates of return, achieving an optimal level of return on investment andmaximising shareholder value by having effective systems in place for measuring and modelling revenues and costs and translating this into an effective dialogue with the regulator.

• Understanding the regulatory landscape of the Turkish energy and electricity market and advice including tax-effective structuring and restructuring.

We trained around 10,000 peopleon the new Turkish CommercialCode.

We helped over 1,000 companies to converttheir accounts and reporting system to IFRS.



Working together: tax structuring forelectricity company reorganisation

A leading Turkish utility companyplanned to reorganise their electricitygeneration, trade and distributioncompanies. To do so they needed to havea deeper understanding of the upcomingregulatory developments in the Turkishelectricity market. The company soughtPwC’s help to advise on tax structuringoptions and their practicability underthe EMRA regulations.

DeliverablesWe began by conducting a market inquiryinto the available versions of theamendments proposal for the ElectricityMarket Law No. 4628. We evaluated thepotential holding structures in Turkey, thealternatives for initial public offerings(IPOs) of the companies and mergers ofthe companies under Turkish taxlegislation and EMRA regulations. We alsoanalysed the tax consequences of possibleshare transfer transactions, the taximplications of cash alternatives in theevent of their being excess cash in thecompanies, and the possible service levelagreements between the companies. Forthe preferred restructuring scenarios weprovided regulatory feasibility and SWOTanalysis.

Working together: dialoguewith the regulator

A Turkish industry association needed anindependent statement for theirdiscussions and negotiations with theindustry regulator (EMRA). Theassociation sought PwC’s help to presenta case for the level of returns on theirnetwork activities needed to attractsufficient future investment.

DeliverablesPwC calculated the weighted average costof capital (WACC) in the Turkish electricitynetwork business. We analysed a range ofparameters so that a commonunderstanding could be obtained for allinvolved network operators. Afterbenchmarking the Turkish networks withsimilar standards in other countries, weprovided the association with an expertopinion for their discussions with theTurkish regulator.

Working together: helpingrecently privatised distributioncompanies with their challengesThe newly privatised gas and electricitydistribution companies faced a numberof issues during the post-privatisationphase.

DeliverablesPwC supported all major gas andelectricity distribution companies to formIFRS financial statements; helped on thevaluation and review of the purchase priceallocation and on the application ofcomplex IFRS standards (i.e. IFRIC 12).Moreover, we advised the companies onall related tax implications.



Managing capital projects andinfrastructureThe capital project investment requirements in Turkey aremassive. The Turkish Ministry of Energy and Natural Resourceshas forecasted an investment need of around US$130bn by2020, 70% of it for new generation facilities to meet theincreasing energy demand.

By their nature, capital projects are notpart of day-to-day operations. Whetherrelated to replacement of ageinginfrastructure, or investments inconstruction of new refineries,renewable, nuclear, fossil fuel generationcapacity, buildings or systems, they allrequire separate financing, management,governance and assurance. In a world ofsometimes volatile demand andcommodity prices, these capital projectchallenges are magnified. Thecomplexity of projects is all the greaterbecause of the wide range of companiesinvolved, which itself presents significantproject management challenges.

There is a need to bring effective rigourand challenge to decisions at all stages ofthe capital project cycle. Now more thanever, the success of capital projectdelivery is critical to competitiveadvantage. From project appraisal all theway through to completion andoperation, a solid project managementstrategy will optimise your capitalproject delivery. Getting the taxposition right from the beginning of theproject is crucial for the project’s successto ensure all tax benefits could beachieved through structuring andforward planning.


• Effective project appraisal: Soundproject definition and effective decisionmaking at the outset of a capital projectare critical to a successful outcome. Wecan help with option appraisal,modelling and feasibility studies, as wellas measures to assess balance sheetimpact, structuring and financing,funding resources, tax, legal and real estate implications.

• Deciding on the right finance and theright contract: Companies face a seriesof critical choices regarding fundingoptions, contractor selection andmanagement, and project and qualitymanagement arrangements. We canhelp you secure appropriate funding andwe have a range of tools to help withcontract design and selection issues,including assessing the best contractualarrangement to match your projectrisks, mapping of supply chain risk, costmodelling and design of incentives.

• Keeping projects on or ahead ofcourse: We can put in place the thingsyou need to stay on track, includingbudgeting and forecasting processes,project cost and schedule systems,reporting procedures, risk management,open book contract control and projectaudit. We are on hand to help youconduct reviews of project controls,processes and programme management,due diligence on programmes andprojects as well as to identify the lessonslearnt through post-project close-outand review.

• Getting projects back on track: PwCcan help with a range of preventativemeasures to avoid projects going wrongto start with. We can identify issuesearly through review and health checksand then assess and select correctiveoptions. We understand the steps thatneed to be taken to recover projectsquickly and effectively. Whereappropriate, we can help yourenegotiate commercial terms. We areon hand if you are facing arestructuring, contract re-let andnegotiation, transfer or disposalsituation and can advise on the bestcourse of action to take.

Total installed capacityin Turkey

in 2010

49,087 MWin 2019

61,700 MWSource: TEIAS



Working together: getting the financialmodel right for nuclear power

One of the world’s biggest nuclear powerproducer was in negotiations with theTurkish authorities to develop a nuclearpower plant on Turkey’s Black Sea coast.They asked PwC to review their financialmodel, including the tax aspects.

DeliverablesWe evaluated the company’s financialmodel for this investment and calculatedthe tax part of the model. The companywas then able to use this model as a basisfor tariff negotiations with the Turkishgovernment. At this moment, the talksbetween the two parties are stalled.



Improving performance andoperational effectivenessAn era of higher prices, stretched supply lines and investment inexpanded and diversified infrastructure is putting significantadditional cost into the value chain. At the same time,companies can expect continued and, indeed, greater resistanceto costs being passed on to end-users.

Turkish energy, utilities and miningcompanies need to look at a variety ofstrategies – technological, financial,operational, and fiscal – to improveefficiency. On the operational front, forexample, companies must minimise riskin asset security, serviceability,performance availability, reliability andrestoration after breakdown. Billingerrors, theft and loss are a majorchallenge for Turkish energy companies.Multiple billing cycles mean thatunbilled revenue is also part of thecalculation.


• Target operating model: All organisations face internal or external factors forcing them to increase their level of operational and structural complexity. Among the many of such factors; unclear governance structures, inefficient operations, shareholder or customer pressures, or reporting and regulatory changes may be just to name afew. This complexity creates inertia or ‘drag’ within the organisation, whichhinders its performance. We have the expertise to help you design the most suitable Operating Model for your business, which would span the design ofthe corporate structure; internal and external business interactions; the infrastructure, management and operating structures deployed in order to do business; and the skills, values and behaviours prevalent across the organisation.

• Process & ERP requirement assessment and design: Our team can help you toassess and reengineer your processesalong with required enterprise systemrequirements to fit in this complexbusiness landscape. Moreover we canassist you during selection of the righttechnology, and evaluation of theimplementation partner for ERP projectsas well as providing quality assurance during the technology implementation to ensure the selected technology will fit thedesigned processes with all desiredbenefits.

• Procurement assessment and improvement: We leverage our expertise to streamline procurement processes for spend categories such as equipment investment, spare parts, cable, fuel and oil, services, office supplies, IT and other direct/indirect goods and services. We utilise our iScale best practice assessmentand “Find the money, Get the money, Keep the money” procurement improvement tool set to align the organisation’s structure and strategy along with process, people and technology dimensions.

• Corporate performance management (CPM) technologies: Our experts use their technical and process knowledge to implement CPM technologies to makethe right information available in atimely and efficient manner to decision makers incentivised to drive performance. We provide system implementation and maintenance services on Oracle Hyperionand SAP Business Objects tools, supporting strategic planning, budgetingand forecasting, consolidation andreporting, and balanced scorecardmanagement processes.

• Tax function effectiveness: The ability ofyour tax function to deliver valuedepends on how well your company isable to adjust to regulatory changes andemerging market trends. Given thepressure to do more with existingresources, companies need a flexible yetthorough solution to address theoperating performance of their taxfunction. We have developed services tohelp your company improve theperformance of its tax planning, taxaccounting, financial reporting, taxcontroversy and compliance functions.

• Financial risk management: Volatility ininterest rates, foreign currency and commodity prices can have diverse impact on the financial performance of your company. We can assist you during the management of these risks by implementing new hedging strategies and/or reviewing existing hedging strategies in terms of best practice. In the implementation of hedging strategies, risk mapping of all financial risks is defined and such risks are calculated with sensitivity analysis or more complicated models, such as Value at Risk (VaR) and Cash Flow at Risk (CFaR).We also provide assistance with respect to the development of policies, procedures and management reporting templates for your company’s risk exposure.

“Retail customer behaviours arechanging and you need to build arelationship with those customers sothat they become part of the solutiontoward the overall goal of energyoptimisation. This will pose a bigchallenge because energy companieswill need to adopt technologies andadjust to new patterns of consumerbehaviour. It will not be easy and a lotof utilities will probably be unable tomake that transition.”

Johannes Teyssen, Chairman and CEO,E.ON AG, Germany in PwC’s 14thAnnual Global CEO Survey



Working together: meetingthe needs of growth

A Turkish holding company’s energy unitgrew rapidly. The size of the organisationand the number of employees hadincreased as part of this growth. But in aperiod of rapid change, organisationalroles, process variations and flows hadbecome unclear. In order to sustain thegrowth rate, the company needed to alignits organisational structure to newprocesses, calibrate standardisation andclarify the variety of processes acrossdepartments.

DeliverablesPwC carried out a detailed ‘as-is’ businessanalysis of the company’s energy groupstructure. This included understanding thestrategic goals, performing ‘brown paper’analysis and ‘as-is’ process mapping for allbusiness process flows and functions (energytrade, project management, ship yardbuilding, facility management, accounting,finance, purchasing, plant management,production management and planning). Wedefined the issues and improvementopportunities, highlighted approaches torealising the benefits and gaining ease ofimplementation (standardising of businessprocesses), and then provided a high-levelstrategic roadmap to deliver theseimprovements.



Addressing sustainability issuesSustainability brings tremendous opportunities for businessesbut also presents major challenges. Many Turkish energy,utilities and mining companies have realised that by investingin energy-efficiency measures, responding to changingconsumer buying patterns and ensuring sustainable businesspractices in their supply chains, they can operate moreefficiently and create value in new ways. Reporting on socialand environmental issues has become more important thanever, as consumers, investors and other stakeholders demandgreater transparency about all aspects of doing business today.

PwC is the first professional servicescompany to provide assurance onsustainability reporting in Turkey. PwCTurkey’s sustainability team is a memberof the Turkish Business Council forSustainable Development and theSustainability Task Force of the TurkishIndustrialists and Businessmen’sAssociation (TÜSIAD). Our teammembers are accredited by the GlobalReporting Initiative (GRI), whosemission is to create conditions for thetransparent and reliable exchange ofsustainability information through thedevelopment and continuousimprovement of the GRI SustainabilityReporting Framework.

PwC brings a wide perspective, drawingon our experience across businesssectors, and in shaping government andNGO regulations and policies. This helpsus give you a well-informedsustainability viewpoint as well as theinsight to assess compliance and proposeimprovements.


PwC can help ensure that sustainability isat the heart of your company’s strategy. Wecan provide:• assessments of a company’s unique

sustainability-related risks andopportunities, where relevant usingstakeholder engagement programmesand benchmarking

• development of a strategic vision that isrealistic and suited to the individualclient

• design of an implementation plan andcommunication strategy

• identification of the most meaningfulmeasures for financial, operational andregulatory performance anddevelopment of progress measurementsystems.

We also provide compliance, assuranceand reporting services for all facets of thesustainability agenda, including:• stand-alone sustainability reports and

the sustainability portions of annualreports

• assessment of your existing reportingsystems, processes and controls oversustainability performance reporting,and determinations of their readinessfor assurance

• advice on the design andimplementation of data gathering andreporting systems

• harmonisation of monitoring andreporting practices throughout globalorganisations

• assistance in defining clients’ reportingaims, their audiences and whatinformation they need to report

• adherence to standardised reportingpractices and reconciliation of multiplestandards

• quantification of carbon footprints at theproduct, process or organisational level

• certified emissions reductions.

PwC is a partner in the initiative behindWindMade™, the first global consumer labelidentifying products and corporations made withwind energy.

The WindMade™ label provides qualifyingcorporations the ability to effectively communicate toconsumers a commitment to wind energy thatdifferentiates their brand, and signals a strongcommitment to renewable energy. WindMade™ is anon-profit organisation supported by Vestas WindSystems, The Global Wind Energy Council (GWEC),WWF, UN Global Compact, The LEGO Group, PwC,and Bloomberg (the official data provider).

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Working together: leading the wayin sustainability reporting

A prominent Turkish industrial group with40 companies and over 10,000 employeesinvolved in building products, healthcareand consumer products, approached PwCwith a request for independent assuranceof key environmental data for itssustainability report. Specifically, theGroup wished to assure consolidatedenergy consumption and emissions datafor its 27 industrial sites in Turkey in orderto use this as a benchmark for businessstrategies and targets and establish itsleadership as the first group in Turkey toassure and publish consolidated energydata. The Group is the first member of theWorld Business Council for SustainableDevelopment (WBCSD) from Turkey.

DeliverablesWe performed an independent assurance ofenergy consumption and carbon emissionsand reviewed these data according to therespective principles. We followed this upwith interviews with relevant groupmanagers; evaluation of the design andimplementation of key processes andcontrols for managing and reporting;selective tests on the data; and runninganalytical procedures over the reporteddata.



What makes us different?

As PwC Turkey, we have a dedicated energy, utilities and miningteam that brings together highly experienced members of ourassurance, tax and advisory practices. Our core industry teamcomprises over 100 professionals, equipped with a variety ofexpertise in the oil and gas, utilities and mining industries,drawing on national and international experience. As well asworking directly on client issues, we interact with the industrythrough thought leadership activities and our involvement inmajor Turkish industry events and conferences.

We are part of PwC’s worldwide networkof energy, utilities and mining industryspecialists and have access to a range ofways of exchanging knowledge andexpertise with our colleagues fromEurope, Middle East, America, Asia, Africaand Australia. Each year our teamparticipates in PwC’s Global Energy,Utilities and Mining conference, with over500 partners and managers from ourglobal practice, representing more than60 countries. The event provides a focusfor discussion of the challenges facing thesector. The 2010 conference took place inIstanbul, Turkey.

Our knowledge

From our experience, we develop industry-specific instructional materials and reportson market developments to help keep youinformed. Some of our recent publicationsinclude:

Nice work if you can get it!Developments in the Turkishpetroleum marketThis report outlines the Turkishpetroleum market and currentdevelopments during challengingtimes for this sector.

Energy DealsIn our annual series we reviewM&A activity in the Turkishenergy sector. The reportsanalyse underlying deal dynamicsand examine the rationale behindthe overall trends and keyindividual deals.

Opportunities in the Turkishelectricity distribution andgeneration marketThese two leaflets aim to giveinterested investors a brief overview of the distribution regions and powerplants scheduled for privatisation.

On the sunny side of the street:Opportunities and challengesin the Turkish renewableenergy marketA guide for existing and potentialinvestors and their financiers in theTurkish renewable energy market. Italso communicates their expectationsand concerns to decision makers.

Financial reporting in theutilities industry in TurkeyA comprehensive analysis of financialreporting in the utilities industry inTurkey setting out the majoraccounting practices adopted by theutilities industry under IFRS in respectof issues of particular relevance to theTurkish utilities sector.


• We live and breathe the sector, understanding your issues and able torespond to your priorities.

• We have over 4,000 staff worldwide dedicated to the energy, utilitiesand mining sector.

• Our global coverage means we are on hand wherever you need us.

• We deliver to a single PwC global quality standard, giving you theassurance of local market insight matched with worldwideprofessionalism and rigour.

• We listen to you and continuously build your feedback into our work.

• All our projects are reviewed by a review partner who is not part of theproject team, building independence into your feedback and appraisalof us.

• We give you the best talent from around the world. We are recognisedas a number one employer of choice in many key locations.


Global network

With more than 4,000 full-time specialists, the PwC GlobalEnergy, Utilities and Mining practice is the largest group of itskind in the industry. We have over 400 partners serving globalenergy companies worldwide. Currently we audit 25% of theFortune Global 500 energy companies and we work with clientsin every energy market in the world.

PwC’s 2010 Annual Global Energy, Utilities and MiningConference was held in Istanbul and was chosen to be partof the International Energy Agency’s global roadshow tolaunch the World Energy Outlook 2010.

Our commitment to the energy, utilitiesand mining industry goes beyond ourservices. Our thought leadership andsponsorship of industry activitiesreinforces our direct work with clients.PwC is a Patron of the World EnergyCouncil, and a long-time sponsor andparticipant at the World Energy Congressand the World Petroleum Congress.

PwC’s Annual Global Energy, Utilities andMining Conference, held in Istanbul, waschosen to be part of the InternationalEnergy Agency’s global roadshow to launchthe World Energy Outlook 2010. PwC is amember of the World Nuclear Associationand of Eurelectric. PwC and the WorldEconomic Forum have been strategicpartners since the mid-1980s. We are aknowledge provider for the Annual Meetingin Davos, Switzerland, and regionalsummits conducted by the World EconomicForum every year.

At a glance – why PwC?

Our energy, utilities and mining practice isthe only Big Four firm to serve as a keysponsor of the Global Oil Summit atCERAWeek each year. This annual event isone of the most widely attended in theindustry. Our energy, utilities and miningpartners participate in many of the leadingindustry organisations in different countriesand regions around the world, to keepabreast of developing regulatory changes,industry information and to hear first-handfrom oil and gas, utilities and miningprofessionals.



Specialised services for energy, utilitiesand mining companiesPwC Turkey can help energy, utilities & mining companiesevaluate priorities, assess risks and build stakeholderconfidence. Our energy, utilities & mining practice focuses ondelivering professional services to companies of all sizes, acrossall segments of the industry. We provide industry-specificsolutions in the fields of audit and assurance, tax, transactions,performance improvement, human resources and crisismanagement to help companies address their business andstakeholder issues.

Audit and assurance

PwC audits and provides non-financialassurance services to major energy,utility and mining companies in all keyenergy markets. Recognising that allcompanies want assurance teams thatknow their issues and understand theirbusiness challenges, PwC’s energyprofessionals bring a high level ofknowledge to their work. Our industrydedicated professionals receivespecialised training, includingregular updates on industry specificissues.

Our financial assurance practice has thein-depth practical knowledge andexperience necessary to help yourorganisation with complex financialaccounting issues related to matters suchas valuations, pensions and share plans,listings, IFRS conversions, and corporatetreasury and company secretarialfunctions.

PwC assurance teams around the worlduse a single, global assurancemethodology, fully compliant withInternational Auditing Standards,international standards for non-financialassurance engagements, and applicablenational standards. Our globally consistentapproach to assurance means that,regardless of location, PwC people canunderstand and evaluate your businessusing a single language and commonmethods. In turn, that gives you a uniformlevel of exceptional quality in all of ourassurance services. This methodology alsoenables us to quickly organise and deploythe multinational and cross-functionalassurance teams our larger multinationalclients require.

Strategically important non-financial datais increasingly relevant for senior internaldecision makers and demanded byinvestors, analysts and regulators. Therehas also been growth in the importance ofrelated governance, conduct and riskmanagement practices. We help clientsintegrate the reporting and assurance ofnon-financial data with financial data, tojoin up the reporting and assurance of theorganisation’s key, strategic performanceinformation. PwC also provides assuranceand improvement recommendations on theeffective operation of governance, conductand risk management systems andprocedures.

Tax and legal services

Energy, utilities and mining projects arecomplex and challenging projects, and notjust from a supply chain point of view. Anumber of management, financing andlegal issues need to be thought through indetail. How will the project be managed?What might the accounting, tax and legalimplications be? How should ownership ofthe project be structured? Whatcontractual arrangements need to be inplace? What type of incentives might beavailable for the project and what affectcould that have on the post-tax return?What special considerations will apply tojoint venture arrangements? What transferpricing issues need to be addressed?

Some companies choosing to expand intothe Turkish energy market are consideringa merger or the acquisitions route as a wayof doing this, rather than developing theproject on their own. Early tax planning fora merger or acquisition can reduce the taxcosts of the transaction and the long-termsustainable tax rate following thetransaction.

Other areas to consider include: carryingout pre-acquisition due diligence; thefinancing options available to you; and thevalue of carrying out quantitative analysis.It is also important to review theimplementation and structuring optionsfor the deal, to plan for an integratedapproach post-deal and put in place robustlegal contracts, especially where jointventures may be involved.

PwC has the strongest brand in Turkey with a 17% higher BHI* score than our closestcompetitor.

* The interviews for the Brand Health Index (BHI) survey are conducted by anindependent research firm. The respondents do not know that the interviews werecarried out for PwC.



Our energy, utilities and mining tax teamis made up of an international network ofprofessionals with an in-depth knowledgeof both local and international marketsand the tax regulations that may affectyour business. Coupled with considerableknowledge of project financing andstructuring, mergers and acquisitions itensures that we can provide the rightanswer for every type of power project andfor your business.

Inter-company transactions across bordersare growing rapidly and are becomingmuch more complex. Our dedicatedtransfer pricing specialists with advancedtraining in economics, accounting, law andproject management, are ready to workwith you. Furthermore, our industry andtax authority experience and uniquecapabilities enable us to developinnovative approaches for energy industryparticipants.

With the rapid growth of the energy sectorin Turkey has come increasing internationalcomplexity. The correct handling of legalrequirements and risks now need to beconsidered as closely as the technical,economic and tax based aspects to ensurethe financial and technical success of theseprojects. Key considerations include thevarious legal relationships of the partiesinvolved, all of which have to be structuredappropriately. Responsibilities need to beallocated clearly among those involved inthe project; this will increase the success ofthe project and reduce the risk of conflictbetween the parties. Reliability andresilience are required not just with regardto the technology being used, but also onthe part of the advisers who are helping todevelop the financial, tax and legalframework. PwC Legal and other legalfirms within the PwC global network assistproject developers, investors, banks, plantconstructors and service providers fromfeasibility and business case studiesthrough to completion and disposal.

Advisory servicesPlayers in the energy, utility and miningsectors are faced with a wide variety ofchallenges during the planning andrealisation of their projects. These rangefrom how to finance project developmentand realisation, handling transactions forthe purchase or sale of individual projects,and completing project pipelines, tostrategic issues such as entry into newmarkets or countries.

Our advisory practice puts energy sectorcompanies and other industry stakeholdersat the leading edge. Whether you arepursuing new opportunities, responding toevents or coping with the daily pressuresof compliance, growth, competition andshareholder value, we are there to help.We are able to deploy trusted industryspecialists with unparalleled knowledge ofbusiness processes and technology andcustomer relationship skills, as well asfinancial and accounting expertise. Ouradvisory practice includes skilledprofessionals in corporate finance,modelling, strategy, managementconsultancy and sustainability.

ConsultingWhat keeps organisations achievingsustainable success in the face of constantchange? PwC consultants are there to helpyou come up with clear answers to thisquestion. To succeed in a globallynetworked world, you can no longer simplyrely on proven strengths and leave yourorganisation’s success to chance. Adaptingto new circumstances rapidly and takingaccount of the unexpected is getting moreimportant with the current marketsituation. Whether you’re aiming todevelop a particular area of your businessor want a comprehensive transformationand to develop and maintain a competitiveposition, our experienced consulting teamscan help you make and, most importantly,implement the right decisions.

• Strategy Consulting: How can abusiness achieve clear differentiationand positioning?

• Business Consulting: Do you want toknow how your processes compare tothe best practices and what the bestopportunities are for performanceimprovement?• Finance and Treasury: How do you

maintain operational excellencethrough efficient and effective processand controls?

• Operations: Do you want to increaseefficiency of business processesthrough optimisation, automisationand integration?

• Information Technology: How do youharness IT as a key driver of businesssuccess? Do you know your company’senterprise application needs?

• Business Recovery Services: How doyou go about transforming a crisis intoan opportunity?

• Forensic Services – Dispute Analysisand Investigations: How do youeffectively tackle forensic issues andeconomic crime?

DealsHow do you measure and safeguard thevalue added by a deal? Any deal, whetherit’s an acquisition, merger, disposal, IPO,management buyout or another form oftransaction, involves specific opportunitiesand risks that need to be managed well andwith experience. You need specificknowhow and expertise to manage thecomplexity encountered at every phase ofa deal. We have the technical knowledgeand transaction experience necessary tohelp your organisation all the way tosuccess. Our support does not end withpreparing and executing the transaction.We will also be there to advise and supportyou in the post-deal stage, even at criticalmoments of the integration phase:

• Corporate Finance: What makes amerger, acquisition, IPO or MBO along-term success?

• Transaction Services: How can youreduce the risks and obstaclesencountered during a deal?

• Valuation Services: How do you qualifyand quantify the value of a business?



Contact our energy, utilitiesand mining team

Faruk SabuncuPartner, Energy, Utilities and Mining LeaderTel: +90 (212) 326 6082E-mail: [email protected]

Orhan CemPartner, Advisory LeaderTel: +90 (212) 376 5302E-mail: [email protected]

Ediz GünselPartner, Assurance ServicesTel: +90 (212) 326 6090E-mail: [email protected]

Murat ÇolakogluPartner, Tax ServicesTel: +90 (212) 326 6086E-mail: [email protected]

Engin AliogluPartner, TransactionsTel: +90 (212) 376 5304E-mail: [email protected]

your priorities, ourprofessionalism...

...doing greatwork togetherWe aim to have a continuing dialogue,listening to your priorities, understandingyour business issues, and delivering greatwork together.



Helping youget aheadPwC firms provide industry-focused assurance, tax andadvisory services to enhance value for their clients.More than 161,000 people in 154 countries in firmsacross the PwC network share their thinking,experience and solutions to develop fresh perspectivesand practical advice.

PwC, operating in Turkey since 1981, consists of fiveoffices; in Istanbul (two), in Ankara, in Bursa and inIzmir, with 31 partners and 1,100 professional staff.

For further information, please visit:www.pwc.com/tr/energy


© 2011 PwC Turkey. All rights reserved. In this document, “PwC” refers to PwC Turkey, which is a member firm of PricewaterhouseCoopersInternational Limited, each member firm of which is a separate legal entity. “PwC Turkey” refers to Basaran Nas Bagimsiz Denetim ve SerbestMuhasebeci Mali Müsavirlik A.S., Basaran Nas Yeminli Mali Müsavirlik A.S. and PricewaterhouseCoopers Danismanlik Hizmetleri Ltd Sti. whichare separate legal entities incorporated in Turkey within the PwC Turkey organisation.


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