Turkey is currently in talks to explore for oil and gas in Bulgaria, with similar plans for exploration in Iraq and Libya, Turkish Energy Minister Alparslan Bayraktar has revealed.
According to the minister, state-owned energy company Turkiye Petrolleri AO (TPAO) will sign an agreement with an unnamed foreign partner within the next month to conduct exploration in Bulgaria’s section of the Black Sea.
Turkey not only wants to boost domestic oil and gas production, but also harbors ambitions to become a regional energy hub. Turkish President Recep Tayyip Erdo?an has been trying to position Turkey as an energy hub, connecting natural gas producers to its east and south with markets to the west. The country’s strategic geographical position and infrastructure give it an advantage in this regard.
Turkey and Bulgaria signed a deal in 2023 to permit Bulgaria’s state-owned Bulgargaz to import 1.85 billion cubic meters of gas per year– good for ~60% of Bulgaria’s annual demand–through the Strandzha-Malkoclar interconnection border point with Turkey.
Bulgargaz has to pay a €2 billion service fee to Turkish gas firm Bota? over a 13-year period, regardless of whether it makes use of this capacity. According to Bayraktar, the capacity to export via Bulgaria right now is only around 3.5 billion cubic meters a year but capabilities can be boosted.
“What we need is an increase in the capacity of the interconnection between Turkey and Bulgaria”, which currently can only receive about half of the amount of seven billion cubic meters per year that, from a technical point of view, Turkey can provide it,” Bayraktar told Bloomberg.
But Libya is probably Erdogan’s biggest gamble, that is just as much about power and influence as it is about energy.
After more than a decade of instability, Libya is expanding oil production, despite extreme political fragility that has analysts increasingly worried about a return to civil war.
According to Chairman of Libya’s National Oil Corporation Masoud Sulaiman, Libya plans to increase oil output from 1.4 mb/d currently to 2 mb/d in 2028. However, ramping output to that level will require considerable capital outlays: Abdulsadek estimates that Libya needs between $3 billion and $4 billion to reach its intermediate goal of oil production rate of 1.6 mb/d, adding that a new license bidding round is expected to be approved by the cabinet.
The Libyan economy relies heavily on oil, with fossil fuels accounting for more than 95% of its economic output.
Last year, Turkey announced that it was prepared to significantly increase natural gas exports to the European Union, desperate to further wean itself off Russian gas. In order to do that, the most likely route is to re-export Azeri natural gas from Turkey. That, in turn, would require Turkey to take in more Russian gas to make up for the shortfall.
Ankara is keen to play the role of savior and boost its leverage with respect to Brussels, but it wants some demand guarantees before it starts spending on the necessary infrastructure.
The Trans-Anatolian Natural Gas Pipeline, which forms part of the Southern Gas Corridor bringing Azerbaijani gas to Europe, is a strategic advantage for Turkey. The country is also home to five LNG terminals, seven gas pipelines, three floating storage units, and two underground storage facilities, as well as considerable excess import capacity that could be used for trading.
On the other hand, over the past couple of years, Europe has been trying to secure alternative gas supplies to replace Russian gas transiting through Ukraine. Russian gas stopped flowing to EU states via Ukraine after a five-year deal expired on January 1 2025, marking the end of a decades-long arrangement.
Ukrainian President Volodymyr Zelensky declared that his country would not allow Russia to “earn additional billions on our blood”, with a cross-section of leaders describing it as yet”another victory” against Moscow.
Russia can still send gas to Hungary, Turkey and Serbia through the TurkStream pipeline across the Black Sea. Azerbaijan’s natural gas sold to Turkey could be re-exported to Europe, possibly through Bulgaria, but not without effort and expense.
In an interview with Bloomberg, Bayraktar pushed hard for a Bulgaria route, noting a potential for increasing volumes to the EU up to 10 billion cubic meters per year, while sending a clear message to Brussels: It won’t happen without some demand guarantees.
Turkey’s ambitions to become a leading energy hub in Europe also gathered momentum after the sudden collapse of the 54-year Assad dynasty in Syria.
Turkish companies are well-placed to secure major contracts should Syria transform into a free market, with the cost of reconstruction estimated at $400 billion.
Turkey could construct a gas pipeline to the west of Syria and connect to the Arab Gas Pipeline network (which links Syria, Jordan, and Egypt).
This would help Turkey to offer regional gas producers such as Israel and Egypt a more commercially viable route to European markets compared to current LNG alternatives.
Source: Oilprice.com
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