Energy-hungry Turkey drilling for more oil

You may think that you cannot do without your car and therefore without the automotive industry, or that you can’t live without your computer and consequently the information technology industry.

However, in reality there is just one industry which is more important than any other: the traditional energy industry. Without fuel from crude oil and natural gas, modern society and all its accoutrements would grind to a halt as cars would run out of oil and laptop batteries would never be recharged. Turkey is, sadly, energy poor; that is to say it lacks large fossil fuel reserves and has had to spend millions of YTL to generate power from its limited natural resources by building hydroelectric dams across most major rivers, solar panels on many houses and wind farms on the Aegean coast.
Other alternative supplies like a nuclear power plant at Akkuyu remain unrealized even after a decade of planning. Geothermal energy sources, while significant, have yet to be comprehensively exploited. Alternatives to fossil fuels currently only provide around 15 percent of Turkey’s needs, and global warming has begun to have serious adverse effects on hydroelectric power output.

Fossil fuels supply over two-thirds of Turkey’s energy needs while over 75 percent of its oil for consumption is imported. Unfortunately, much of this is supplied from countries such as Iran and Syria, which have a history of hostility towards Turkey. It has been forced to foster better relations with suppliers like Libya — where there is less bad blood — and become involved in exploration projects in partnership with the Israelis in the Mediterranean.

However, recent surges in the price of international crude oil — which have increased to as high as $78 per barrel — have simultaneously alarmed Turkish politicians and opened new doors of opportunity for the national oil industry. The record prices for world crude on the Mediterranean spot market have encouraged Turkey to undertake larger exploration projects and make the possible extraction of crude from local oil shale much more feasible.

Shale oil constitutes Turkey’s second largest solid fossil fuel reserve after lignite, and total reserves are estimated to be about 5 billion tons. A recent report from the International Conference on Oil Shale held Nov. 7-9, 2006 in Amman makes an interesting read. According to estimates in 1993, a manufacturing cost of $31-$43 per barrel was quoted for a plant processing 50,000 barrels per day. Although the figures need to be updated, the studies were done when the price of crude oil was around $30 per barrel; with current prices averaging over $60 this year and the prediction that they will remain high, oil shale investment and development look increasingly attractive.

Most of Turkey’s oil fields are located in southeastern Anatolia near its borders with Iran, Iraq, and Syria. Last week it was reported that an area formerly littered with land mines near Mardin on the Syrian border had been cleared and that 21 of 25 wells sunk by the state-owned Turkish Petroleum Corporation (TPAO) were now producing 2,400 barrels of crude oil per day. In another area along the same border, the recreation yards of six gendarmerie stations were explored; they are now producing 50 barrels per day. The gendarmerie in the region has even offered, in a show of patriotic enthusiasm, to move out of their barracks to allow more wells to be drilled.

Syria, on the other hand, has been quick to remind Turkey that they are not the friendliest of neighbors, placing rigs directly opposite the Turkish ones on the other side of the border, and they are now also tapping into the same reservoir. The rigs stand just 10 meters apart on either side of the barbed wire of the border. The TPAO remains undeterred and has announced that they will be drilling 10 more wells as soon as they clear more minefields.

Zaman