Page 10 - MEOG Week 34

MEOG PROJECTS & COMPANIES MEOG

– looks ambitious. external position may only be temporary.
“There is a risk that the authorities respond
Shares and lira slide to the improvement in the balance of payments
From the immediate reaction of the markets it position by loosening policy. The resulting
appeared that Erdogan had overplayed his hand pick-up in domestic demand would leak into
– the Borsa Istanbul BIST-100 index fell as much imports and cause an offsetting deterioration in
as 1.8% and ended August 21 1.5% down, while the current account position.”
shares in Turkish energy companies including Reuters reported many officials and analysts
refiner Tupras, Aksa Enerji and Aygaz retreated as cautioning that it could take up to a decade for
sharply after the news and the lira was trading gas from the Black Sea find to come online, while
0.5% lower at 7.33 per dollar by the end of the it would need billions of dollars of investment to
day. build up the infrastructure for production and
However, he must be given some benefit of supply, but it also cited Sohbet Karbuz, director
the doubt for, who knows, if fortune gives the of hydrocarbons at the Paris-based Mediterra-
widest of grins to Turkey’s gas explorers in the nean Observatory for Energy, as observing that
years ahead, some of his further lashings of rhet- Turkey may move ahead swiftly with investment
oric – ”This reserve is actually part of a much big- decisions.
ger source. God willing, much more will come. “The process will move very quickly, in terms
There will be no stopping until we become a net of financing, time and procedures. Help will
exporter in energy,” Erdogan also told assembled probably be needed from foreign companies
media – could come true. from a technical and technological perspective
As for the discovery as it stands, Jonathan but I see 2023 as a reasonable target [for extrac-
Lamb, a senior oil and gas analyst at investment tion],” Karbuz said.
bank Wood & Company, was not talking of a
game-changer, instead telling Bloomberg: “The Data ‘indicates more gas’
question now is how much of this gas is recover- The gas discovery is located in waters 2,100
able. This is not clear yet. What the market really metres deep in the Tuna-1 zone, 150 km from
wants to know also is how much they can pro- Turkey’s coast. Turkish Energy Minister Fatih
duce per year, but I don’t think they are in the Donmez said drilling extended another 1,400
position to say that yet.” metres below the sea bed, adding: “We will go
Turkey, almost entirely reliant on imports down a further 1,000 metres ... and data shows
from countries including Russia, Azerbaijan, we will probably reach gas there too.”
Iran and Iraq to meet its energy needs, had an The find is close to an area where maritime
energy import bill of $41bn last year. Emphasis- borders of Bulgaria and Romania converge and
ing the impact the gas resource could have on not far from Romania’s Neptun block. That,
the country’s economy, Erdogan’s son-in-law until now, was the largest gas find in the Black
finance minister, speaking by video link from the Sea in decades. It was discovered eight years ago
deck of the Fatih drill ship instrumental in iden- by Petrom and Exxon. Romania so far only has
tifying the Black Sea gas, said: “We will remove shallow-water gas projects, with the deep-water
the current account deficit from the agenda of find yet to be exploited. A company backed by
our country.” The Carlyle Group is also exploring off Roma-
nia, with the objective of bringing up gas in 2021.
Lira saved from 7.50? Rosneft has explored in the Russian part of the
Such a stunning prospect would of course be Black Sea but without concrete results.
a life-saver for the lira – Turkey market watch- The Black Sea reserve is unlikely to sate the
ers said this week’s impact of the headline gas appetite of Erdogan for hydrocarbons. Turkey
story may have saved the lira, which hit a record remains in dispute with Greece and Cyprus
low of 7.40 earlier in the week, from plunging over the borders running through the eastern
beyond 7.50 – but Jason Tuvey at Capital Eco- Mediterranean as it searches for oil and gas in
nomics offered a rather more sober outlook in a contested waters. A similar row with Egypt is
note to investors, saying: “Turkey’s discovery of rumbling. Crete, meanwhile, has complained
gas in the Black Sea will provide some boost to that the Erdogan palace refuses to recognise its
the country’s external position, but it might be existence on the map where potential gas and oil
quickly eroded. deposits are concerned.
“President Erdogan unveiled the discovery Erdogan said he also expected “good news”
on Friday of a field containing 320bcm of gas. from exploration activities in the eastern Med-
While this is pretty small compared with other iterranean. If that particular good news turns
major gas fields globally, the deposit will help to out to be particularly “good”, the oil and gas
cut Turkey’s energy import bill, which amounted execs might have to factor in the arrival of more
to 2% of GDP last year. That said, there are rea- French warships.
sons to be cautious. For one thing, it will take Standing shoulder to shoulder with Greece,
time for the necessary infrastructure to be put French President Emmanuel Macron has lately
in place before the gas can be extracted – Mr. become deeply unimpressed by the activities of
Erdogan said that the aim is for gas to be ready Turkey’s survey vessels and drill ships, invariably
for use by 2023. Even then, the boost to Turkey’s out at sea with a naval escort.™

P10 www. NEWSBASE .com Week 34 26•August•2020