Turkish President Recep Tayyip Erdogan announced Friday the discovery of a vast natural gas field in the Black Sea. With the prospect of long-term energy security, Erdogan is also vowing to step up energy exploration in Aegean and eastern Mediterranean waters that Greece says it controls.
"Turkey has made its biggest natural gas discovery," said Erdogan at a news conference, calling it a "historic day" and adding that the discovery offers Turkey a "new era."
The Turkish president said the new gas field contains 320 billion cubic meters of natural gas and could start producing by 2023, to coincide with the centenary celebrations marking the foundation of the Turkish Republic.
Reuters news agency, citing sources, claimed the find could meet Turkish energy needs for the next 20 years.
Some analysts warn it could take a decade before Turkey fully reaps the rewards of the discovery. The depth of the Black Sea makes extraction challenging and expensive. Production costs are estimated to be as high as several billion dollars, at a time when natural gas prices are at near-record lows because of a supply glut.
"There are a lot of unknowns," said analyst Atilla Yesilada of Global Source Partners. "We don't know how much it's going to cost to extract, what the purity of the gas is, all at a time of record low gas prices."
The discovery of indigenous energy reserves is a critical strategic goal of Ankara.
"Turkey is a major gas importer. It is one of the fastest-growing energy consumers," said energy expert Mithat Rende, a former Turkish ambassador to Qatar. "Turkey is heavily energy-dependent on imported gas and oil. What we need is our own resources."
Turkey spends around $40 billion a year on imported oil and gas. A significant factor behind the Turkish currency’s chronic weakness, which hit a record low this month, is that Turkey spends more on imports than exports, causing a large account deficit.
Finance Minister Berat Albayrak, speaking Friday from the drilling ship that discovered the gas field, said the energy discovery was a financial game changer. "It will remove the current account deficit," said Albayrak. "We will be soon talking about current account surpluses."
"Turkey is committed to long-term contracts of buying piped gas from Iran, Azerbaijan and Russia. You can't simply walk out of those contracts," said Yesilada. "Selling gas on the world market will not be easy either, as there is an oversupply."
The Black Sea gas find is the fruit of the Turkish government's aggressive search for energy. Since 2017, Ankara purchased five research vessels that have combed Turkey's surrounding seas for years.
Turkey's energy quest is at the center of an increasingly bitter dispute with Greece. The neighbors are contesting energy rights in the Aegean and eastern Mediterranean seas, where Turkish and Greek navies are currently facing off.
This week, Washington deployed a warship to the region to monitor the situation.
The Black Sea gas discovery is giving impetus to Turkish efforts in the Mediterranean. “We hope to see similar good news in the Mediterranean as well," said Erdogan. “We will be accelerating our drilling activities in the Mediterranean."
Ankara is already facing calls from the European Union to step back from its exploration, but such requests were again rejected. "The EU is spoiling Greece," said Erdogan.
Friday's announced gas discovery is timely for Ankara, offering potentially significant leverage over Moscow. Turkey and Russia are poised to renew a 25-year-old energy deal that expires next year.
Mehmet Ogutcu of the London Energy club says under the current deal, Russia is Turkey's leading gas supplier, charging rates double what other European countries pay the Russian energy company Gazprom. “The revising of the Russian contract is a top priority in Ankara," said Ogutcu.
Turkey's quarter-century of dependency on Russian energy has underscored bilateral ties. A more energy-dependent Turkey would deny Moscow an instrument of leverage over Ankara. "We need a more balanced energy relationship, but Turkish-Russian relations are not based only on Russian gas," says Ogutcu. "There are so many issues. It's a valuable relationship."