Turkey Announces Black Sea Gas Find (Update)
(Adds comments from TPAO in para 2, changes sourcing.)
Turkey's president, Tayyip Erdogan, announced the country's biggest-ever gas discovery August 21, saying the 32obn m³ Tuna field is part of a bigger structure under the Black Sea.
The CEO of state producer TPAO, Melih Han Bilgin, said in a company announcement that the company would immediately start acquiring 3D seismic and appraise the entire licence to produce first gas by 2023. TPAO owns the entire licence and he said the find – 11 trillion ft³ of recoverable gas – marks "a new beginning for TPAO and Turkey." He said it would supply lean gas for decades and that the triumph was Turkey's alone.
The find could have far-reaching implications for future gas imports and upcoming negotiations with Russia, Azerbaijan and Iran, said Wood Mackenzie, while warning that the announced size of the field and the development time should be treated with caution.
"Turkey has realised the biggest natural gas find of its history in the Black Sea," Erdogan said, according to Reuters, adding that ultimately Turkey aims to become a net energy exporter. The Fatih drill ship began work late last month in the Tuna-1 zone, about 100 nautical miles north of the Turkish coast in the western Black Sea.
"This reserve is actually part of a much bigger source. God willing, much more will come. As a country that depended on the outside for gas for years, we look to the future with more security now," Erdogan said. "There will be no stopping until we become a net exporter in energy," he said.
Turkey's finance minister Berat Albayrak, speaking aboard the Fatih, said that "with the economic and exploratory potential, we will remove the current account deficit from the agenda of our country."
The gas find is in waters 2,100 metres deep, energy minister Fatih Donmez said, with drilling extending another 1,400 metres below the sea bed. "Our operations here are not finished. We will go down a further 1,000 metres... and data shows it is probable we will reach gas there too," he was quoted saying by Reuters.
One of the biggest finds of the year: Woodmac
Consultancy Wood Mackenzie said "this is Turkey’s biggest-ever find – by a wide margin – and one of the largest global discoveries of 2020. What’s more, it reaffirms the deepwater Black Sea’s hydrocarbon potential after several disappointing wells in Bulgaria.”
But reaping the rewards will be complex and a 2023 date for bringing the discovery – renamed Sakarya – looks ambitious, it said, with plenty of appraisal work to be done, potentially costing billions of dollars. A foreign partner would also be needed, in all likelihood.
"Deepwater projects are complex in any environment, but the Black Sea poses additional logistical challenges that must be managed. This is one of the factors that has stalled Romania’s Neptun Deep megaproject, just 100 km north of the Tuna well.”
But competitive tax terms will help lure majors over the border: they have had mixed recent success and "will take note of this momentous news,” it said. Despite coronavirus, Turkish gas demand has only fallen 3%, year-to-date, versus last year. That is a less severe fall than many other European markets. It stands at 45bn m³/yr.