Türkiye decided to become an oil and gas power on the resale of Russian raw materials

Ankara conquers the European fuel market at the expense of foreign energy resources

Turkey, which until recently was considered a consumer, not a producer of energy resources, expects in the coming years to take a prominent place in the Western commodity market already as a supplier of fuel. Not only has Ankara already managed to switch over a significant share of Russian hydrocarbon exports, but on the eve of the presidential election it announced the discovery of large oil and gas fields, with the subsoil of which it intends to satisfy both its own fuel appetites and partially close European demand for barrels and cubic meters. The task looks ambitious, but in fact it is quite feasible, although Turkey will most likely try to solve it at the expense of miners from our country.

Turkey’s energy base is growing with new assets literally by leaps and bounds. Oil deposits found in the southeast of the country in the Gabar Mountains near the city of Cizre with a potential production capacity of 100,000 barrels per day have become just another episode in Ankara’s production progress. President Recep Tayyip Erdogan announced similar successes back in July last year – then the details of the development of a new field in southern Turkey with relatively small reserves of 7.5-8 million barrels were disclosed, and last December it became known about the launch of three wells in another southeastern province of Mardin: local resources were not an example higher – 150 million barrels, valued at $12 billion. Our concern is to maximize the contribution of discoveries to our energy independence,” says Erdogan.

Contrary to the Turkish leader’s assertions that his country’s own energy industry is moving forward in ten-mile steps, while Ankara performs the functions of a speculator and profits from the resale of foreign, imported goods. In the first half of last year alone, Turkish refineries, according to local regulators, significantly increased the production and export of petroleum products made from cheap Russian raw materials, earning, according to the most conservative estimates, at least $2.5 billion. deliveries of aviation kerosene and marine fuel: the export of the first increased by 70%, and the second – by 240%. Moreover, Western customers were not at all worried that the gasoline and diesel going through the trading floors of Ankara and Istanbul were partially of Russian origin: for example, the States increased the purchase of jet fuel from 2% to 48% of the total production of Turkish enterprises in six months.

It is worth noting that in the natural gas sector, Erdogan is also trying to strengthen his positions more and more actively: at the end of December, he announced the discovery of a large field in the Black Sea, which strengthened the country’s “blue fuel” reserves to 710 billion cubic meters. The cost of the found raw materials offhand is estimated at $1 trillion. “The project impresses with its scale and ambition,” says Aleksey Grivach, deputy head of the National Energy Security Fund. “If this plan is realized, the Turks will become leaders in successful gas production on the Black Sea deep-sea shelf.”

However, tempting prospects do not prevent Ankara from continuing to demand energy preferences from Russia: after the May holidays, Turkey convinced Russia to defer the repayment of debts in the amount of $600 million for previously delivered gas until 2024.

“So far, at least in the situation with “blue fuel”, Ankara’s plans to soon independently meet national needs, not to mention the establishment of competitive exports, look rather illusory,” says Sergei Pravosudov, director of the National Energy Institute. Last year, domestic demand for gas in Turkey amounted to about 54-55 billion cubic meters. Almost all hydrocarbons were imported. The Black Sea project, which Erdogan is betting on, according to preliminary estimates, will provide daily production within 10 million cubic meters, or 3.6 billion “cubes” per year. Obviously, the Turks will not be able to quickly achieve gas independence at such a pace.

With regard to oil production, Ankara is also not yet doing as well as Erdogan wanted. Currently, Turkey produces about 7% of the volume of “black gold” needed for the domestic market. On the one hand, a new field in the Gabar Mountains, promising to produce up to 100 thousand barrels per day, will increase the country’s own production of “black gold” by 2.5 times. On the other hand, even such, at first glance, a significant increase will still not allow the Turks to cover their own needs for raw materials: the total production will increase to 90 million barrels per year with a consumption of more than 2 billion barrels. “This will be only the first step towards gaining hydrocarbon independence,” Vladimir Chernov, analyst at Freedom Finance Global. “In this regard, many of the current statements of the Turkish authorities are considered as pre-election rhetoric, although the first talk about the largest deposits started long before the start of the election campaign.”

Considering all the above facts, Ankara’s desire to create a gas hub on its territory for the subsequent distribution of raw materials to potential customers becomes natural. “With virtually no energy resources of its own, Turkey is going to become a key player, at least in the fuel market of the Old World,” believes Sergey Suverov, investment strategist at Arikapital Management Company. — This trading hub will be represented by three powerful producers of hydrocarbons: Russia, Azerbaijan and Iran. Last year, Turkey already demonstrated how to make money on the purchase of sanctioned and therefore cheap Russian oil – the country’s refineries received a record margin on the resale of finished gasoline and diesel not only to European countries, but also overseas – to the United States. Surely, taking advantage of its favorable geographical location, Ankara will continue to exploit this practice in the future, gradually acquiring the status of a “hard nut” in the global energy market. It may even become a member of OPEC+… However, it is unlikely that the Turks will be able to get rid of the usurious formula – buy low, sell high – in the near future.”