BFF-35, 36 Turkey announces historic gas discovery in Black Sea

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Turkey announces historic gas discovery in Black Sea

ISTANBUL, Aug 21, 2020 (BSS/AFP) – President Recep Tayyip Erdogan on
Friday said Turkey had made a historic discovery of gas in the Black
Sea, but would still speed up contentious exploration in the
Mediterranean that has pitted it against Greece and the EU.

Turkey hopes the discovery can help wean it off imported energy,
including from Russia, which comes at a high cost at a time when the
local currency is weakening and the economy is more fragile because of
the coronavirus.

Erdogan said the 320-billion-cubic-metre deep sea find was made at
a site Turkish vessel Fatih began exploring last month.

He added that he hoped to see the first gas reach Turkish consumers
in 2023, the 100th anniversary of the birth of the modern republic.

“Turkey made the biggest discovery of natural gas in its history in
the Black Sea,” a delighted Erdogan said during a speech in Istanbul’s
Dolmabahce Palace.

“My Lord has opened the door to unprecedented wealth for us,” he enthused.

The Fatih, Turkey’s first drilling vessel, is named after Fatih
Sultan Mehmet, the Ottoman Sultan who conquered Constantinople —
current-day Istanbul — in 1453.

The vessel made the discovery in the Tuna-1 field off the coast of
Eregli town in the northern province of Zonguldak after beginning the
search on July 20, Erdogan said.

– ‘Reasons to be cautious’ –

The Turkish lira gained value against the dollar on Erdogan’s
promise on Wednesday to report “good news” on Friday, but fell after
the size of the find was less than half of that suggested in initial
reports.

Analysts were also wary of overplaying the discovery’s
significance, pointing out that deep sea drilling is expensive and
takes time.

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“There are reasons to be cautious,” said Jason Tuvey, senior
emerging markets economist at Capital Economics.

“For one thing, it will take time for the necessary infrastructure
to be put in place before the gas can be extracted,” he said in a
research note.

Tuvey added “the boost to Turkey’s external position may only be temporary.”

Ozgur Unluhisarcikli, Ankara director of the German Marshall Fund,
tweeted the discovery was “not bad at all (but) not a game changer
either.”

The volume of gas announced by Erdogan would cover Turkey’s total
natural gas needs for six years, at current consumption rates.

– High energy import bill –

Turkish Finance Minister and Erdogan’s son-in-law, Berat Albayrak,
speaking aboard the Fatih, said the discovery and future potential
finds could reduce Turkey’s import-heavy trade balance by cutting its
high energy import bill.

Turkey’s energy import bill corresponded to two percent of total
economic output last year, according to Capital Economics, with most
purchases coming from Russia, Iran and Iraq.

Turkey’s Energy Market Regulatory Authority said in January the
country’s annual cost of energy imports was between $12 billion and
$13 billion (10.2-11.1 billion euros).

This month, Erdogan ordered the resumption of controversial energy
exploration off the southern coast close to a Greek island in disputed
eastern Mediterranean waters.

The issue has put Turkey on a collision course with Greece, Cyprus
and the European Union, and exacerbated tensions with France, which
has stepped up its military presence in the region.

But Erdogan showed no sign of yielding to the EU’s repeated call to
immediately end the eastern Mediterranean search.

“We will accelerate our activities in the Mediterranean with the
deployment by the end of the year of (drilling ship) Kanuni, which is
currently under maintenance,” he said.

“God willing we expect similar good news,” Erdogan added.

Turkey dispatched the seismic research ship Oruc Reis accompanied
by warships to the region on August 10, angering Greece who said the
move threatened peace.

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