Dr Mehmood Ul Hassan Khan
Most recently, Turkish President Recep Tayyip Erdogan has announced the discovery of a large natural gas reserves off the Black Sea coast. It would start a new era for the macro-economy and energy policies of Turkey in the days to come.
President Erdogan stated that amount of gas discovered is 320 billion cubic meters (11.3 trillion cubic feet) which has further enhanced national political unity and even the opposition rushed to congratulate Erdoğan’s government.
Turkish President Erdogan said his country was determined ultimately to become a net energy exporter. Turkey has now realized the biggest natural gas find of its national history in the Black Sea. Its ship made the discovery about 100 nautical miles north of the Turkish coast. It is Turkey’s biggest-ever find by a wide margin, and one of the largest global discoveries of 2020.
According to Turkish energy minister Fatih Donmez it is located in waters 2,100 meters deep with drilling extending another 1,400 meters below the sea bed. He planned of further 1000 meters drilling. If the country discovers more such resources in the near future, which is highly likely, this will bring greater benefits to the country and economy.
The benefits of Turkey’s recent giant natural gas discovery in the Black Sea will further transform and revolutionize its socio-economic sectors in the medium and long term as the gas is expected to be ready for public consumption in 2023.
The size of the discovery dwarfs all the natural gas Turkey has ever produced (16.6 billion cubic meters), and is expected to be worth roughly $65 billion in value. It is estimated that the reserves will be enough for the country’s gas needs for the next eight years.
Being prominent regional geopolitical analyst I expect multiplier socio-economic, geopolitical and geostrategic dividends attached to new discovery of gas reserves for Turkey which would reshape its national economy by reducing import bill, stability in financial & money markets and increase its revenue capacity.
It will rescue Turkey from foreign exchange sensitivity which is crucial for its economic transformation and economic sustainability. Reduction in Turkey’s energy import bill, which stood at $41 billion during 2019 would also boost government finances and help ease a chronic current account deficit which has helped drive the lira to record lows against the dollar.
The said discovery of the natural gas reserve would change regional energy landscape and create new equation for its imports-exports contracts with Azerbaijan, Iran, Iraq and Russia. It has strategic importance and implications too as the new discovery are in the Black Sea, unlike the eastern Mediterranean, which is riddled with all kinds of geopolitical problems.
In recent times, its national currency lira has stumbled to record lows produced high inflation however, the currency recovered some losses following reports of the discovery of gas deposits.
It would also redesign its foreign policy especially, in Black Sea Region (BSR) and Eastern Mediterranean Region (EMR). Ongoing tussle between Turkey and Greece & Cyprus indicated importance of energy resources and its strategic importance for regional domination in terms of greater economic power and political entity to lead. Moreover, it would be transformational and revolutionized its energy market.
To brighten the chances of new gas discovery the Turkish drilling ship, Fatih, had been carrying out exploration operations in the Tuna-1 sector in the western Black Sea for the past month.
It is hoped that Turkey may move ahead swiftly with investment decisions for which foreign companies may be hired technical and technological assistance but 2023 as a reasonable target. However, the operation of the gas in the field will be handled by state owned companies.
Energy has been one of the main actors in the socio-economic development of Turkey for the last so many reasons but it has also increased its imports bill. The discovery is projected to ease the financial burden for a number of years as Erdogan said authorities were planning to have the natural gas reserve ready for Turkey in 2023.
Nevertheless, the discovery is not likely to end Turkey’s dependence on foreign alternatives but Erdogan said the reserves found were “only part of much richer resources” given the fact that Turkey has one of world’s top drilling and seismic operation fleet and also holds operations in the Eastern Mediterranean, rich in terms of hydrocarbon reserves, along with the Black Sea region, Turkey’s energy dependence might decline significantly in the future. Indeed, further discoveries might even turn the energy deficit country into an exporter in the days to come.
Easy and smooth supplies of energy is an important tool for national prosperity, massive industrialization and smarter economy. It has been playing an important role in the modern civilization in terms of civility modernization, social transformation, political stability and above all economic sustainability and it is hoped that Turkey’s gas discovery is likely to have foreign policy repercussions.
It will pave the way for independent policies and might increase Turkey’s regional influence. It is likely to strengthen Turkish’s national policy towards energy security. It will reshape its energy relations with Russia and Iran.
Black sea may become center of regional as well as international power politics. There may be a new geopolitical structure for maneuvering. It will further enhance regional competition among Turkey, Greece, Egypt, France or Germany in the days to come.
Turkey could use its energy diplomacy for further strengthening of its regional as well as international stature in a more effective manner. Moreover, it will further diversify its energy resources and widen its options too.
EU-Turkey relations might be positively impacted after Turkey discovered new reserves in the region. The discovery could increase the importance of Turkey in the eyes of the European leadership as it wants to have alternative energy suppliers.
Turkey will hope to replicate the success of Egypt, whose economy rebounded on the back of gas discoveries in the eastern Mediterranean that began with the Zohr gas-field and turned the North African country from an importer of gas to a net exporter. It hopes that Black Sea will lighten its shores and recipients too.