Turkey has long dreamed of achieving energy independence and extricating itself from the mercy of Russia in supplying its gas. That dream has come at the expense of regional security through the exploitation of smuggled oil, the creation of conflict lines in the Mediterranean and unrecognized agreements to seize Greek gas and Libyan oil.
Ankara’s recent announcement about its largest-ever gas discovery is an expedient distraction from economic misery at home as it grapples with a tumbling currency, runaway inflation and burgeoning public debt. Qatar provided some band aids to stick over its gaping financial wounds in the form of a credit line, but the country needs much more than this to solve its dire economic crisis.
Interestingly, the announcement came after Turkey failed to overcome opposition to its exploration activities from Greece, Egypt and Cyprus in disputed Mediterranean waters.
Neither should we forget the potential 10-year time horizon to extract the gas and deliver it to the end consumer. The headline number of 320 billion cubic feet was indeed headline-grabbing, but is less so when you consider that Turkey consumes about 53 billion cubic meters of gas annually. So that really equates to about six years’ worth of domestic gas consumption.
Assuming that Turkey has the ability to make the upstream investments that would be needed to extract gas from the field and develop the necessary infrastructure to deliver it to the consumer we are talking about a decade of development.
However, the economic issues that Ankara faces demand a rather quicker solution.
Turkey does not yet have the technology necessary for the extraction task at hand because it has been an importer of most of its gas needs for so long.
The Turkish company BOTAS, which carries out exploration and drilling, lacks experience in offshore field work, so it is hard to see it tackle such an undertaking without a foreign partner.
With current market conditions defined by weakening gas prices, this may be easier said than done.
• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq
