Turkey's Offshore Gas Find Could Transform its Energy Sector

On Friday, Turkish President Recep Tayyip Erdogan announced that the nation's state oil company hit a 320 million cubic meter gas deposit at the Tuna-1 well in the Black Sea. The discovery could change Turkey's energy sector overnight, according to analysts - if the technical challenges can be overcome.

“Even if the official 320 billion cubic meter figure given by President Tayyip Erdogan when he announced the discovery is treated as an estimate of gas in place, this is Turkey’s biggest-ever find – by a wide margin – and one of the largest global discoveries of 2020," said Wood Mackenzie analyst Thomas Purdie in a research note. "However, no matter the political and economic importance, reaping the supply rewards will be complex . . . 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, located just 100 kilometers north of the Tuna well.” 

An international oil major could assist in the development, according to Purdie, and the resource base could be significant enough to warrant investment in a down market. The formation could supply more than a third of Turkey's internal demand for gas, making it less reliant on billions of dollars' worth of energy imports, analysts said. In particular, this would reduce Turkey's reliance on American LNG imports, according to Murray Douglas, the research director of Wood Mac's European gas and LNG division. 

Turkey intends to continue exploration work in the vicinity of the new find, and presidential spokesman Ibrahim Kalin told Bloomberg that the government is "very hopeful that it will lead to other fields in the same area."

The news comes as Turkey doubles down on a controversial exploration program for energy deposits in contested waters of the Eastern Mediterranean. Turkiye Petrolleri's drillships and seismic survey vessels have been operating in Cypriot-claimed waters for years, and Turkey has recently dispatched a survey vessel to a sector of Greece's continental shelf claim as well. 

“We are determined to solve our energy issue,” Erdogan said Friday. “We will not stop until we become a net exporter of energy.”