Turkey set to announce new natural gas discoveries in the Black Sea

Through Firat Kozok and Cagan Koc at 3/6/2021

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ANKARA (Bloomberg) – Turkey has discovered new deposits of natural gas in the Black Sea, people familiar with the matter say, and is expected to make an announcement soon.

Initial data from the offshore Amasra-1 well shows a significant amount of newly discovered gas, the people said, asking not to be identified while discussing confidential information. Turkish explorers last year discovered 405 billion cubic meters of gas in the nearby Tuna-1 well, the largest ever in the Black Sea, and said at the time that production could start by 2023 .

No independent audit of total and recoverable gas on any of the discoveries in the so-called Sakarya field has been made available by the authorities. Officials said state oil company Tpao plans to develop the fields on its own and will not need foreign funding.

The Energy Ministry declined to comment on Amasra’s discovery. But President Recep Tayyip Erdogan hinted at it in a TV interview earlier this week, promising to deliver “good news” from the Black Sea coast on Friday. He presented recent energy discoveries as a solution to some of Turkey’s long-term economic vulnerabilities, including its energy import bill which must be paid in foreign currency.

Previous announcements on the Black Sea gas fields have boosted Turkish assets, from bonds to stocks. Erdogan and his government are battling declining popularity after rising unemployment during pandemic shutdowns.

mediterranean spat

Turkey has stepped up oil and gas exploration off its coast in recent years. Its activities in the Eastern Mediterranean have sparked clashes with European Union member states, Greece and Cyprus.

The Sakarya field is expected to provide up to 30% of the gas that Turkey’s $ 730 billion economy needs when the production plateau is reached, scheduled for 2025.

Ankara currently imports almost all of the 50 billion cubic meters of gas it consumes annually. Authorities expect domestic production to increase the country’s demand for gas by 60%, reaching 80 billion cubic meters per year by 2030.

The discoveries are also expected to allow Turkey to import cheaper gas and reduce the average annual energy bill by around $ 44 billion.

Long-term contracts with Russian Gazprom PJSC, Azerbaijani Socar and Nigerian liquefied natural gas producers for around 16 billion cubic meters of annual supply will soon expire.

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