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What does Turkey’s gas discovery mean for the country and the region?

Addressing to the nation on Friday, Turkish President Recep Tayyip Erdoğan announced that Turkey’s Fatih drilling vessel discovered the country’s largest natural gas reverse in its history in Tuna-1 field in the Black Sea. Erdoğan said the reserve discovered is amounted to 320 billion cubic meters. There are additional layers below the discovered reserve, according to Erdoğan, who stressed that there could be more natural gas in the same spot.

Tuna-1 field, which has been renamed as “Sakarya natural gas field” after the discovery, is some 150 kilometers from Turkey’s coast and close to the maritime borders of Bulgaria and Romania. It is also not far from Romania’s Neptun block, where the largest gas reserve discovered eight years ago by Petrom and Exxon.

Speaking at the deck of the Fatih on Friday, Turkey’s Finance Minister Berat Albayrak, who made significant changes in Turkey’s energy policy during his term as the energy minister, said that the discovery marked a new era and the country’s current account deficit issue will be off the agenda thanks to the discovery. Ankara hopes to begin production by 2023.

Energy demand has been one of the main burdens on the Turkish economy and the country is dependent on energy-rich countries. Turkey is producing only about 1 percent of its natural gas locally and it spends around 50 billion dollars annually on foreign energy. Ankara buys one-third of its natural gas from Russia, one-fifth from Azerbaijan, 17% from Iran and 12% from Algeria.

It was generally believed that Turkey’s geology was not feasible for hydrocarbon reserves for decades. But successful discoveries of the regional countries such as Israel, Greek Cypriot Administration and Egypt in the Eastern Mediterranean pushed Ankara in the last years to invest more in energy exploration.

In 2017, Turkey developed a new energy policy and bought seismic and drilling ships in order to start exploration in its territorial waters in the Black Sea and the Eastern Mediterranean. The country’s goal was simple: To diversify its energy supply. As Russia and Iran both weaponize energy exports against it from time to time, Turkey has been looking into alternative sources.

320 billion cubic meters of natural gas is a significant discovery even though some inside and outside Turkey are skeptical about it. Over the last decade, Israel first discovered 320 billion cubic meters of gas in the Tamar field in the Eastern Mediterranean. 600 billion cubic meters found in the Leviathan field followed Tamar. At the Aphrodite field, the Greek Cypriot administration found 130 billion cubic meters of natural gas; it still continues its exploration and drilling activities. Egypt, on the other hand, reportedly discovered 800 billion cubic meters of natural gas in Zohr field, which is the largest-ever discovery so far in the East Mediterranean where the maritime border disputes between the regional countries fueled after these discoveries. Currently, there is a race between littoral states of the Eastern Mediterranean to declare their maritime boundaries.

Once it becomes operational, Sakarya gas field in the Black Sea is projected to ease the financial burden of Turkey for around eight years. It will also help the country solve most of its energy supply security problems for a while. Moreover, the recent discovery would make Turkey more ambitious to find more reserves in the Black Sea and the Eastern Mediterranean. Hosting multiple pipelines to meet the energy-supplier countries in Asia and the Middle East with the consumers in Europe, Turkey is known with its appetite to become a regional energy hub. Domestic needs will always be a priority for the country, but there is a potential that it can turn into a new energy supplier, especially for the European markets, if there will be further discoveries. There is no doubt that the geopolitics of energy trade in its region will change if that happens.

Of course, developing offshore wells in Sakarya gas field can take a few years, but in short term, Ankara can still make some immediate gain from this discovery by using it as a bargaining tool. Turkish does not have to be quick to renew its energy contracts as they will expire by 2023 and 2026. However, Turkey can use the gas find as a leverage to renegotiate the terms and pricing.

Most importantly, energy contracts with Russia may turn into shorter term contracts, while the new gas discovery will also be a challenge for the Turkstream pipeline, which stretches to the Anatolia carrying Russian gas via the Black Sea. That is why, Russia might offer significant price concessions to Turkey. As I said above, energy supplies have sometimes been weaponized against Turkey, the discovery will possibly strengthen Turkey’s hand against Russia, and Iran as well. As Moscow’s hand will be weaker against Ankara, who have developed close ties with it, would like to come closer in order to enhance collaboration on energy-transfer routes.

Meanwhile, possible further discoveries might positively effect Turkey’s relations with the EU, which is heavily dependent on energy sources of Russia, despite objection by the US. Since the European states seek alternatives to diversify its energy supply, it closely follows the developments in the Eastern Mediterranean where Turkey and Greece have been at odds. The importance of Turkey can increase in the eyes of European organization, if it discovers more energy reserves, and it will not have any difficulties in transferring gas to Europe due to its existing energy routes. That would mean the beginning of a new chapter for Turkey and the EU relations.

These predictions may sound premature, but this latest development opens the door slightly to new discussions over the energy geopolitics in the Eurasia making us think about the current equation and potential alterations on the regional energy game. While Turkey will eagerly proceed its exploration and drilling activities, the others will continue to have their eyes on it.

Merve Şebnem Oruç is an award-winning Turkish journalist and columnist for Daily Sabah and HABER. She is on Twitter here.