OPINION: Turkey's excitement is palpable after President Recep Tayyip Erdogan last week broke the eagerly awaited news about the nation’s major natural gas discovery in the Black Sea.
The drillship Fatih found 320 billion cubic metres of gas at the deep-water Tuna-1 well, and Erdogan jubilantly declared that the Sakarya gas field discovery is a precursor to a larger resource base for Turkey.
Turkey relies almost entirely on imported natural gas to keep its lights on and its robust industrial sector functioning, so the announcement has delighted the nation.
Word that the historic find is in the Black Sea, rather than in contested East Mediterranean waters, also came as a relief.
Yet for the country to attract major international oil companies as partners in developing the Sakarya discovery, Turkey will need to halt its contentious exploration activities in the East Mediterranean.
Otherwise, the nation will find it hard to get help from majors such as ExxonMobil, Shell, Eni, Total and Chevron, all of which are present in Cyprus.
Luring the majors
Erdogan is seeking first gas from the Sakarya discovery in 2023. Although appraisal work is needed to determine the recoverable reserves and get a better grip on the geology, Sakarya is the biggest gas find in the Black Sea — where BP, Shell, Chevron and Brazil's Petrobras had unsuccessfully drilled in the past two decades.
Only ExxonMobil had limited success with the Neptun Deep find off Romania in 2012, uncovering estimated reserves of 42 billion to 84 billion cubic metres.
The US giant has put its 50% stake in the block up for sale, however, amid low gas prices and a tough regulatory environment in Romania.
Yet Turkey's Sakarya discovery could help to lure the majors back to the Black Sea. Operator TPAO will need to partner with one of them, as development will cost billions of dollars and the Turkish state player lacks the needed deep-water experience.
Turkey's domestic energy market is highly attractive, providing added incentives to investors. The nation also has an elaborate pipeline gas export system that supplies Europe, which is keen to reduce its reliance on Russian gas.
Turkey spent $41 billion on energy imports last year. Its payments to suppliers such as Russia, Iran and Azerbaijan are a drag on its currency, which is under intense pressure amid the impact of the Covid-19 pandemic.
The country consumes around 45 Bcm per annum of gas, with only 1% of it produced locally.
That is why Erdogan is so enthusiastic about a fast-track development that will enhance the security of Turkey’s energy supply and its role as a key source of gas to Europe.
Despite the president’s optimistic gas outlook, however, Erdogan also made remarks bound to further raise tensions in the East Mediterranean.
Turkey is sending a second exploration vessel to the Mediterranean, where warships deployed by Turkey and Greece recently collided.
The minor accident occurred as Greek vessels shadowed Turkish seismic vessel Oruc Reis, deployed in contested waters off Cyprus in early August.
France also sent fighter jets and a frigate in support of European Union members Greece and Cyprus.
The developments vividly demonstrate risks of a potentially disastrous conflict associated with the contested exploration work.
As such, Turkey’s best chances of reaping the fruits of its historic Black Sea discovery lie with ending its contentious exploration efforts in the East Mediterranean, not enhancing them.
(This is an Upstream opinion article.)