Turkish president Recep Tayyip Erdogan has announced last Friday that Turkey has made the largest natural resource discovery after the state oil company found 320 billion cubic meter of gas in Black Sea. Turkish Energy Minister Fatih Donmez said the financial value of the find is worth $65 billion. However, the gas find will contribute to the Turkish economy well beyond its value as the Turkey Wealth Fund reportedly eyes to acquire the state oil company TPAO before the end of the year.
The Turkey Wealth Fund (TWF) has allocated around $6 billion for projects so far this year, general manager Zafer Sönmez told Bloomberg in an interview in July. The fund aims to reach $10 billion annual investment by 2023, the sentential of the modern Turkish republic. The fund has already acquired several publicly own assets including stakes in Turkcell and Turkish Airlines to contribute to Turkey’s development and economic stability. The TWF now reportedly eyes to take over Turkish state oil company, TPAO. “ the recent discovery and upcoming potentials both in Black Sea and Mediterranean turned the company (TPAO) extremely valuable which would facilitate inciting much-needed foreign investment in Turkey,” the source told Straturka. Experts say more discoveries could turn TPAO into a global player as the company has hired several prominent deep water drilling experts from renown oil companies. The source whom asked not to be named said acquiring of TPAO could elevate TWF’s status among its peers.
TPAO’s financial contribution to the Turkish economy is not limited to the possible merger in the TWF. Turkish government has been paying Russian Gazprom $300 for one thousand cubic meter gas in a 25 year contract which will end next year. Russian side has been reluctant to give Turkey a break despite large global drop in gas prices. “It’s because Russia knew we had no choice. Turkey imports almost all of its gas need from Russia and Iran,” told an Energy Ministry official. That wont be the case when the sides sits down to negotiate the terms of the new contract next year. According to the sources, Russia has already agreed to $180 dollar for one thousand cubic meter gas for the next contract. People with knowledge of the subject say Moscow may have to agree to a much lower price next year as Ankara has started purchasing LNG from Qatar in an attempt to diversify its supply. However, even $180 means billions of dollars drop in Turkey’s energy bill which will further ease Ankara’s long-standing current account deficit problem.
