Turkey hopes to strike it rich on shale oil find

• Huge reserve estimate
• Turkey assessment underway
• Reduces import dependency

Initial estimates of reserves at a shale oil prospect in Turkey’s southeast are up to 6.1 billion barrels, equal to 15 years of domestic consumption, according to the country’s energy and natural resources minister. 

Work will start soon to assess and then bring online the shale oil find in the province of Diyarbakır, Alparslan Bayraktar, the minister told local media this week.

Turkish Petroleum Corporation and two US resources companies –  Continental Resources, based in Oklahoma City, and the Texas-headquartered TransAtlantic Petroleum – will develop the major shale oil find under an agreement brokered in March. 

The southeast of Turkey has been plagued by decades of chronic violence between Turkish security forces and Kurdish militants but in March the PKK, the main militant group, agreed to a ceasefire.

Bayraktar said the scale of shale oil deposit was at the assessment stage, with the extent of reserves yet to be confirmed. He said that the 6.1 billion barrel figure was an estimate of the field’s potential rather than a hard figure. 

“It’s not yet an official discovery, but if accurate, it would be tremendous,” Bayraktar said.

Turkey meets just 8 percent of its domestic oil needs from local production, the main source being the Gabar field in the country’s southeast, which has an output of 81,000 barrels per day (bpd).

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Earlier this month Turkey’s President Erdoğan said that drillers had discovered a gasfield with 75 billion cubic metres in reserves in the Black Sea. Turkish energy companies have also been searching for hydrocarbons in Somalia, Libya and Pakistan.

The majority of Turkey’s hydrocarbon requirements are provided through imports, consisting of 365 million barrels of oil and around 55 billion cubic metres of natural gas annually. 

Oğuzhan Akyener, the president of Türkiye Energy Strategies & Politics Research Centre, said he was positive the potential of the Diyarbakır fields could be fulfilled. 

“Whether the oil can be produced economically will change according to local conditions when the process begins but I believe that production will take place and be economically viable,” he told AGBI.

“Each cubic metre of natural gas, each barrel of oil Turkey produces will help balance the country’s current account deficit and diminish its dependency on overseas supplies,” Akyener said. 

Energy imports contribute significantly to Turkey’s trade deficit. In March, the export coverage ratio was 76 percent, with energy imports factored in, but rose to 89 percent with oil and gas costs stripped out. 

Another bonus for Turkey, according to Akyener, will be the transfer of technology and knowledge that would come from the Diyarbakır shale oil project.

“Turkey has developed its technical capabilities in conventional energy but by also developing know-how in unconventional resources, Turkey could work with countries in the region,” he said. 

“It would not be only exporting resources, but it would export its know-how and capabilities.”