Turkey's first floating gas production unit transits the Bosphorus, on its way to the Black Sea, in Istanbul. Reuters
Turkey's first floating gas production unit transits the Bosphorus, on its way to the Black Sea, in Istanbul. Reuters
Turkey's first floating gas production unit transits the Bosphorus, on its way to the Black Sea, in Istanbul. Reuters
Turkey's first floating gas production unit transits the Bosphorus, on its way to the Black Sea, in Istanbul. Reuters


Turkey boosts domestic gas for leverage over Europe and Iran


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June 09, 2025

Twenty-five years ago, I drove through south-eastern Turkey. The town of Kahta was enjoying an oil boom, modest by the scale of the Gulf, but with basic hotels crowded with roughnecks, and nodding donkey pumps in the valleys. Now, a more sizeable oil and gas rush is making a real difference to energy-hungry Turkey’s situation.

On the periphery of the Middle East, this big country has not been blessed with hydrocarbons in the same way as its neighbours Iran and Iraq, or even Syria. With the largest population in Europe, if it’s counted in that continent, and cold winters in its mountainous terrain, it is also the fourth biggest gas consumer and sixth largest user of oil.

Its own resources have historically been minor: a dribble of oil from the Kurdish-dominated south-east, around Diyarbakır and the Kahta field I saw, a little gas from Thrace and the Black Sea near Istanbul. That was both an economic and strategic weakness.

The cut-off of the pipeline from Iraq over political disputes has deprived it of a steady source of oil from Iraq’s Kurdistan region. Two-thirds of its oil now comes from Russia, handy as Turkey is not bound by the sanctions that keep EU members off Russian oil.

Turkey has domestic soft coal, which is carbon-intensive. It has been expanding renewable capacity, while Russia’s Rosatom is constructing a nuclear power station on the southern coast. This is now at least four years overdue because of financing and equipment problems.

Otherwise, it has to rely on Russia, Iran and Azerbaijan for gas. This exposes it to sanctions complications, and the increasing unreliability of Iranian supply as its neighbour struggles with meeting its own demand.

But things are changing: not in a way that will upset international energy markets, but enough to be very handy for Ankara.

In 2021, state-owned Turkish Petroleum (TPAO) finally succeeded in making a sizeable oil find. The discovery in the Gabar mountains, in the south-eastern Şırnak area, was reported to have 150 million barrels of reserves, a minnow for the Gulf, but a whale for Turkey. It continues the geological trend running from Iran through northern Iraq.

The Fatih, a sixth-generation ultra deepwater drilling ship which has discovered 710 billion cubic metres of natural gas in the Black Sea in recent years, continues its exploration activities in Zonguldak, Turkey, in October 2023. Getty Images
The Fatih, a sixth-generation ultra deepwater drilling ship which has discovered 710 billion cubic metres of natural gas in the Black Sea in recent years, continues its exploration activities in Zonguldak, Turkey, in October 2023. Getty Images

Several other fields have now been found in the same area. And, unlike Turkey’s historical fields which have heavy oil, here is higher-quality light crude. It could become Europe’s highest-producing onshore oil province. Turkish oil output has jumped from about 60,000 barrels a day before the find, a sliver of its 1.1 million barrels a day consumption, to more than 130,000 bpd.

Promising further oil, last month leading US producer Continental Resources signed a deal to co-operate with TPAO on evaluating shale in the Diyarbakır Basin. Energy Minister Alparslan Bayraktar, whose brother, Selcuk Bayraktar, is married to President Recep Tayyip Erdogan’s daughter Sumeyye, said the area could hold 6.1 billion barrels of resources. The decision of the Kurdish PKK group, considered terrorists by Ankara, to disband should ease operations in this region.

But it is gas that makes the biggest difference to both Turkey’s and the international situation. It discovered a large gasfield, Sakarya, in the deep waters of the western Black Sea, in August 2020. Then energy minister Fatih Dönmez was optimistic in 2023 that hydrocarbons could also be found in the eastern Black Sea.

Sakarya, located close to Istanbul, was followed by further finds, the area now reported to hold up to 25 trillion cubic feet of gas reserves. Last month, Mr Erdogan announced another discovery by the Goktepe-3 well, with 2.6 trillion cubic feet. The water is deep, at 2,200 metres, cold, and lacking oxygen, and the reservoirs are geologically tricky.

Nevertheless, production is rising and is expected to reach 14 billion cubic metres annually by 2028. By 2030, the fields here could cover nearly 30 per cent of Turkish consumption, which stood at 45 billion cubic metres last year.

These developments are important for several reasons. In the crisis year of 2022, Turkey’s energy import bill of $97 billion was twice its current account deficit of $48.8 billion. Without oil and gas imports, Turkey would generally have a positive trade balance. That would ease the pressure on its chronically high inflation and devaluing lira. Mr Erdogan is keenly aware of the importance of keeping down inflation and home energy bills for his political popularity.

Additional domestic gas would reduce the risks of dependence on Russia and Iran, and put Ankara in a stronger position for negotiating new contracts. Turkey has long aimed to become a gas hub, profiting by buying and selling gas, instead of simply transiting a large portion on to Europe. It could do this by mixing Russian purchases with its own production to sell to Europe, evading the EU’s upcoming ban on gas imports from Russia.

Along with the booming renewables sector and the new nuclear reactors, higher gas production and lower prices would aid Turkey in getting off coal. The country targets peak emissions only by 2038, with a net-zero goal of 2053, but it needs a much more robust plan to get there.

TPAO is also active internationally, partly as an extension of Turkish foreign policy. It has drilled several wells (apparently unsuccessfully) in waters it claims around the internationally recognised Republic of Cyprus, and the Turkish navy has blocked some other drilling there. It is interested in Libya, site of another contested maritime border claim. In March, it agreed with the federal government of Somalia to look for oil there.

And Turkish companies are involved in the Qatari-led consortium which has signed a $7 billion deal to provide the new Syrian government – heavily backed by Ankara – with electricity. Turkey has agreed to send two billion cubic metres of gas per year as a first step. The ability to supply Syria’s energy needs could be key in economic reconstruction and future political influence.

The humble wells around Kahta were a foretaste of a new policy and economic tool. Domestic oil and gas are just one facet of a complex local and international energy strategy. It will not ever be Saudi Arabia or Iran, but Turkey’s complex bridge between two continents and two seas has just gained another pillar.

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At a glance - Zayed Sustainability Prize 2020

Launched: 2008

Categories: Health, energy, water, food, global high schools

Prize: Dh2.2 million (Dh360,000 for global high schools category)

Winners’ announcement: Monday, January 13

 

Impact in numbers

335 million people positively impacted by projects

430,000 jobs created

10 million people given access to clean and affordable drinking water

50 million homes powered by renewable energy

6.5 billion litres of water saved

26 million school children given solar lighting

if you go

The flights

Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.

The hotel

Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.

The tour

Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg

THE BIO

Born: Mukalla, Yemen, 1979

Education: UAE University, Al Ain

Family: Married with two daughters: Asayel, 7, and Sara, 6

Favourite piece of music: Horse Dance by Naseer Shamma

Favourite book: Science and geology

Favourite place to travel to: Washington DC

Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

Company profile

Name: GiftBag.ae

Based: Dubai

Founded: 2011

Number of employees: 4

Sector: E-commerce

Funding: Self-funded to date

Company Profile 

Founder: Omar Onsi

Launched: 2018

Employees: 35

Financing stage: Seed round ($12 million)

Investors: B&Y, Phoenician Funds, M1 Group, Shorooq Partners

THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine 

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

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Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

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AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

Updated: June 09, 2025, 8:55 AM`