Turkey's discovery of biggest-ever natural gas reserve in the Black Sea: Here's what you need to know

On Friday, the Turkish President Recep Tayyip Erdogan announced that 320 billion cubic meters of natural gas reserves have been discovered in the Black Sea and is expected to be ready for public consumption by the year 2023. 

The reserve was found after the drillship Fatih started working off the Black Sea Coast. The discovery of natural gas is more than the natural gas that Turkey has ever produced. The discovery will prove to be helpful if it can be commercially extracted as it will reduce the country's dependence on energy imports. 

Why did the US oil prices fell below zero?

As per reports, the natural gas reserve could potentially meet Turkey's energy meets for more than 20 years. 

Where the discovery was made?

On July 2020, Fatih, a drilling ship started exploring a zone called Tuna-1. The exploration zone is 100 nautical miles north of the Turkish coast in the western Black Sea.  

Cost of production and the estimated time 

The natural gas reserve may take 7 to 10 years to start production and estimated investment costs at between $2 billion and $3 billion. 

Why is it a boon to Turkey?

Turkey is completely reliant on the imports to meet its energy needs. Currently, it has been exploring for hydrocarbons in the Black Sea and in the Mediterranean Sea. 

In the year 2019, Turkey paid a bill of $41 billion from suppliers such as Russia and Iran. Thus, if the findings are legitimate, it will not only boost the government finances but will also ease a chronic current account deficit which puts pressure on the lira. It will also cut its current dependence on gas imports from Russia, Iran and Azerbaijan. 

Even though the legitimacy of the reserve is questioned, after the President's announcement, the lira strengthened as traders anticipated a positive impact. 

Key takeaways

1. The ship has been drilling to a depth of 3,500 to 4,000 meters. 
2. The extraction zone is 3,500 meters deep-- 2,100 meters into the sea and 1,400 meters below the sea bed. 
3. The extraction zone lies 100 nautical miles north of the Turkish coast in the western Black Sea. The maritime borders of Bulgaria and Romania meet close to the extraction zone.

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