- Oct 3, 2018
- 3,952
| TYPE | Infrastructure | ||||||||||||||||||||||||||||||||||||||
| BUILDER | Turkiye | ||||||||||||||||||||||||||||||||||||||
| CLIENT | Turkiye | ||||||||||||||||||||||||||||||||||||||
| SITE LOCATION | Turkiye | ||||||||||||||||||||||||||||||||||||||
| SECTOR | Energy | ||||||||||||||||||||||||||||||||||||||
| PROJECT NAME | Natural Gas Drilling and Exploitation | ||||||||||||||||||||||||||||||||||||||
| PROJECT COST | 1,700,000,000.00 | ||||||||||||||||||||||||||||||||||||||
| COMPLETION DATE | 03/01/2027 | ||||||||||||||||||||||||||||||||||||||
| PROJECT INFORMATION | T.C. ENERJİ VE TABİİ KAYNAKLAR BAKANLIĞI | STRATEGIC ENERGY PROJECT TÜRKİYE NATIONAL OFFSHORE GAS Development & Extraction Investment Strategy Tuna-1 (Black Sea) & Şehzade-1 (Aegean) Field Development Program
Certified initial reserve estimates, Tuna-1 (Sakarya field, Black Sea) and Şehzade-1 (Aegean) exploration wells. Combined volume equivalent to approximately 16.3 trillion cubic feet. 1. Executive Summary Türkiye's discovery of substantial natural gas reserves in the Black Sea (Tuna-1 well, Sakarya field) and the Aegean Sea (Şehzade-1 well) marks a turning point in the nation's pursuit of energy independence. Combined, these fields hold an estimated 461 billion cubic meters (bcm) of recoverable natural gas, a resource base capable of materially reducing Türkiye's dependence on imported hydrocarbons, currently sourced primarily from Russia, Iran, and Azerbaijan via pipeline and global LNG markets. This project proposes a coordinated national extraction and development strategy: a $1.7 billion initial commitment from the Ministry of Energy and Natural Resources, matched and substantially exceeded by private consortium capital, to fund drilling infrastructure, subsea production systems, and onshore processing capacity across both fields. The program is structured as a public-private partnership between the Turkish state, TPAO (Turkish Petroleum Corporation) and BOTAŞ, and a consortium of domestic and international energy firms. The strategic objective extends beyond energy security. Successful development positions Türkiye as a net gas exporter within the Eastern Mediterranean and Black Sea basins, strengthens its leverage in regional energy diplomacy, and generates a new sovereign revenue stream to fund industrial and infrastructure priorities. Türkiye imports the overwhelming majority of its natural gas, exposing the economy to currency risk, supply disruption, and geopolitical leverage exercised by supplier states. Domestic production at scale converts a structural trade deficit into a domestic asset, directly reducing the current account gap and insulating the economy from external price shocks, particularly relevant given uncertainty in global supply chains. 2. Project Structure and Funding 2.1 Capital Allocation The Ministry of Energy and Natural Resources will commit $1.7 billion in initial state funding to underwrite drilling operations, subsea infrastructure, and early-phase onshore processing capacity at both fields. This state commitment functions as anchor capital: it de-risks the program for private investment, funds work at the two producing wells with certified reserves, and retains state control over strategic decision-making through TPAO's operating position. The remaining capital requirement will be met by a consortium of private companies alongside Turkish state energy enterprises (TPAO and BOTAŞ), structured as a joint development vehicle. Based on comparable deepwater and offshore field developments of this scale, total program capital expenditure is estimated in the range of $8–12 billion across both fields through to full production capacity, meaning the state's $1.7 billion represents roughly 15–20% of total program cost — consistent with anchor-investor structures used in the Norwegian and Israeli precedents above.
2.2 Governance TPAO as field operator, the Ministry of Energy and Natural Resources as capital steward, and the Ministry of Treasury and Finance overseeing revenue-sharing terms with the private consortium. A transparent licensing and contracting process will govern the selection of private partners for engineering, procurement, and construction (EPC) work. 3. Field Development Profiles 3.1 Tuna-1 / Sakarya Field (Black Sea) Located roughly 170 km off the Zonguldak coast at water depths exceeding 2,100 meters, Tuna-1 is Türkiye's first ultra-deepwater gas discovery, with a certified reserve of 405 bcm. Development will proceed in phases: subsea production systems tied back to an onshore processing terminal, with initial extraction capacity scaling toward full-field output over a multi-year build-out, consistent with the phased approach used in comparable ultra-deepwater fields. 3.2 Şehzade-1 Field (Aegean Sea) The Şehzade-1 discovery in the Aegean adds 56 bcm of certified reserves, diversifying Türkiye's offshore gas base beyond the Black Sea and extending the country's maritime energy footprint into a second basin.
4. Risk Assessment 4.1 Execution and Efficiency Risk As with Türkiye's broader industrial development programs, the principal risk is the gap between theoretical reserve volume and realized, market-ready production. Deepwater extraction is technically demanding, capital-intensive, and subject to delay from engineering complexity, weather windows, and supply chain constraints on specialized subsea equipment — much of which is not manufactured domestically and must be procured internationally, creating exposure to the same import dependencies this program is partly intended to reduce. 4.2 Price and Market Risk Global gas prices are volatile, and the multi-year lead time between capital commitment and first meaningful production exposes the program to the risk that prices at the point of extraction differ materially from prices assumed at the investment decision. A long-term offtake and pricing framework, potentially including domestic price floors or export contracts negotiated in advance, would mitigate this exposure. 5. Expected Outcomes This project is expected to deliver the following outcomes over the medium term:
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