CORRECTED: Erdogan fires a blank in natural gas games

President Tayyip Erdogan said on Saturday Turkey had raised the estimated reserves in a gas field off its Black Sea coast to 405 billion cubic meters after finding an additional 85 billion cubic meters.  The announcement of what is called in Turkish lingo “good tidings” had been pumped up to the level of frenzy  by pro-AKP press, with  some sources claiming the total gas reserve will be upgraded from 320 to 800 billion cubic meters.  The announcement of a mere 85 billion cubic meters is a public relations disaster, because it doesn’t improve upon the best-case scenario of gas arriving  in Turkey by 2023.

 

In August, Erdogan announced that the field contained 320 billion cubic meters of gas, making it Turkey’s biggest natural gas discovery.

Turkey’s aim is to make this gas available to the country in 2023, Erdogan said. “The reserve we discovered in the Black Sea is our country’s largest hydrocarbon source so far,” he said, adding that Turkey’s dependence on foreign natural gas will decrease significantly.

 

Turkey will continue to search for hydrocarbon resources in the Black Sea and the Mediterranean, the president stated. During his speech, he also touched upon the tensions in the Eastern Mediterranean saying that the European Union should act fair, otherwise it will allude to the end of the block.

At this point, PA Turkey has not found any references to the technical aspect of Tuna-1 gas field, which is part of larger geographical formation named Sakarya Field.  While several experts who publicly commented on the field believe the discovery is genuine (that is, not APK propaganda as many opposition sources claim), but the reserves can  be best qualified as “potential” or probable”, but not “proven”. TPAO, the  state company in charge of the exploration and development of the field is yet to announce any specifics about the field.

800 billion cubic meters could have changed Turkey’s fortunes, because the country consumes about 40 billion cm  per year, which would have granted it a 20 year period of relief from gas imports, allowing it to develop its renewables sources.

Ankara will not negotiate with Russia, Iran and Azerbaijan to get  discounts on expiring long-term gas contracts (from 2021 to 2025).  It is not yet clear whether the suppliers which are much more experienced in the energy game would be frightened by 405 bcm of gas.

The markets, too, were about to believe gas would change Turkey’s deteriorating current account deficit problem.  The mere 48 bcm are likely to disappoint investors, unless Ankara releases technical details about the properties of the field.

 

PA Staff

 

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.