TURKISH BLACK SEA GAS

BLOOMBERG- Nov 2, 2022 - Turkey’s President Recep Tayyip Erdogan said on Wednesday that exploration for natural gas in the Black Sea continues, hinting at possible upward revisions to the 540 billion cubic meters of reserves announced last year.

“As these reserves are verified, we will maybe come across even more,” Erdogan said during a TV interview with AHaber in response to a question on new discoveries in the offshore Sakarya gas field.

State energy company TPAO is drilling deeper exploration wells with newly-acquired vessels, Erdogan said. Turkey’s increasing efforts to add to the Sakarya discovery coincide with hefty energy bills that have weighed on voters ahead of elections scheduled for June.

Consumer inflation in Turkey is running at a 24-year high, driven by a surge in energy and food prices partly due to Russia’s invasion of Ukraine in February.

Additional domestic gas production from a bigger reserve base in the Black Sea may allow Turkey to reverse some of the recent electricity and gas price hikes. Erdogan said he also expects to have “positive talks” on pricing of gas from Russia, the biggest source of the fuel for Turkey.

Erdogan pledged to capitalize on the 2020 offshore gas discovery at the Sakarya field to reduce Turkey’s dependence on energy imports and ordered an accelerated development program for the find. Estimated reserves at Sakarya were raised to 540 billion cubic meters last year, from around 320 billion cubic meters originally, the biggest discovery ever in the Black Sea.

Under the original development plan, Turkey projected inaugural gas production in 2023 at a pace of around 3.5 billion cubic meters per year. The objective is to raise that to about 15 billion cubic meters annually within four years of first production, roughly one quarter of the European Union’s output today.

-----