TR Oil & Gas Exploration Update & Discussion

[Pilatino]

A respected reserve assessment company performed 3D research of 13 previous drilling area in Sakarya gas field. As a result of detailed analysis, the previously announced reserve of 540 billion m3 was revised as 652 billion m3. Total reserve is now 710 billion m3 in this field.

Total amount of current found Turkish reserve is around 1 trillon $. More drilling wells are being studied. The reserve volume will be much more than 710 billion m3 only in BlackSea

Not bad at all.

 

[TheInsider]

+170 billion cubic meters is not too shabby. IMHO we will achieve 1 trillion cubic meters in 2023.

 

[Agha Sher]

In the Sakarya gas field, 58 billion m3 new reserves were found in the Caycuma-1 field 3023m below the sea.

so Erdogan made a big announcement worth only a year’s consumption?

 

[Oublious]

so Erdogan made a big announcement worth only a year’s consumption?

thats 100 billion of dollars....

 

[Zafer]

so Erdogan made a big announcement worth only a year’s consumption?

You will be sorry but no, 170 m3 is three and a half years consumption with a prospect for more.

 

[Agha Sher]

You will be sorry but no, 170 m3 is three and a half years consumption with a prospect for more.

No, the discovery is 58bn. The 170 is re-estimations of known gas reserves

 

[Zafer]

No, the discovery is 58bn. The 170 is re-estimations of known gas reserves

Re-estimation after new explorations is still a new announcement and no different.

 

[Deliorman]

Are these numbers confirmed by anyone else other than Turkey's government? How possible it is that the numbers are way overestimated or underestimated?

 

[Zafer]

Are these numbers confirmed by anyone else other than Turkiye's government? How possible it is that the numbers are way overestimated or underestimated?

They are reported conservatively not to give a hearth attack to opposing audience. Reserve essesment is a guesswork but this time made by a foreign company.

 

[TheInsider]

Are these numbers confirmed by anyone else other than Turkiye's government? How possible it is that the numbers are way overestimated or underestimated?

A famous foreign company did the reestimation studies with the data collected from 13 wells. Earlier studies were done with the data from 3 wells. As TPAO drills new wells more data will become available and further revisions should be expected.

 

[TheInsider]

BTW TPAO works with DeMac (DeGolyer MacNaughton) company for reserve evaluation studies. IMHO 1 trillion cubic meters of gas is proven at this point(from the first discovery everyone in the TPAO estimated this) and I think there is a good prospect for more discovery.

 

[Bogeyman]

BTW TPAO works with DeMac (DeGolyer MacNaughton) company for reserve evaluation studies. IMHO 1 trillion cubic meters of gas is proven at this point(from the first discovery everyone in the TPAO estimated this) and I think there is a good prospect for more discovery.

Correction: Turkey's total gas reserves in the Black Sea are 710 billion cubic meters. The value of gas in international markets was announced as 1 trillion dollars. You confused the value of the gas with the discovered reserves.

 

[TheInsider]

View attachment 51948

Correction: Turkiye's total gas reserves in the Black Sea are 710 billion cubic meters. The value of gas in international markets was announced as 1 trillion dollars. You confused the value of the gas with the discovered reserves.

No. 710 billion cubic meters are proven/announced reserves. Reserves in the Sakarya gas field are bigger than this number. At this point, you can ben %100 sure that the Sakarya gas field has a reserve of over 1 trillion cubic meters and it will be announced as more wells are drilled and more reserve revisions will follow. There are different kinds of reserves proven, probable and possible reserves.

Probable, Proven, and Possible Reserves​

The Society of Petroleum Engineers recognizes three main categories of oil reserves based upon how likely an exploration and drilling company believes they are to be extracted.

1. Possible reserves lie at the low end of the scale, with odds of commercial extraction under 50-percent, but higher than 10-percent.
2. Proven reserves sit at the top of the scale, at a 90-percent or above likelihood of commercial extraction.
3. Probable reserves are those with the likelihood of recovery for between possible and proved reserves, or over 50-percent but under 90-percent.
   
   These categories help experts determine the fair market value (FMV) of a company’s reserves. FMV is the price that an item would sell for on the open market. The process involves the application of a discount rate to expected cash flowfrom reserves based on the category into which they fall.
   
   Fair market valuations can help a company for planning and accounting purposes, but rules about what metrics oil companies must disclose to their investors vary by country. Most major oil and gas firms report proven reserves to help investors and analysts model future returns. Not all public companies necessarily communicate probable reserves, however.
   
   Measuring Probable Reserves
   Among companies that do report probable reserves, the most common formulation uses a 2P valuation, which includes both proved and probable reserves. This 2P value is typically understood to be a best-case scenario for recovered liquids from the firm’s portfolio. The EV/2P ratio is used to value oil and gas companies. It consists of the enterprise value (EV) divided by the proven and probable (2P) reserves. The enterprise value reflects the company's total value.
   
   
   Some companies also use a 3P oil reserves equation, which uses the sum of proved, probable, and possible reserves. Because of the low likelihood that some portion of a 3P estimate will get recovered, investors can generally consider it a high-end estimate of likely recoveries.

What TPAO announced up to now is only proven reserves.

 

[YeşilVatan]

Serious question: How economically/technically viable is it to get that gas?

 

[what]

Serious question: How economically/technically viable is it to get that gas?

Just to give you an example, Russia's oil is profitable at around 60 Dollars per Barrell, Saudis can go lower and US shale gas is only attractive when oil prices are really high. Its the same story with gas.

Not an expert but its apparently pretty deep in the ocean, so that makes it a bit expensive, we need to build all the infrastructure from zero so thats a very high initial investment too.

But it all depends on the market price of gas and needs to be put in perspective. Even if the price is higher it means less dependence on foreign sources, more of the money stays inside the country as opposed to abroad. So even at high costs will be worth it. If the government can be trusted and the reserves are as big as announced, that the economies of scale will help with lowering the cost of pumping that gas out the ocean. But we dont know the specifics, but higher volumes and higher gas prices make it more feasible and profitable.

710 bcm will be enough to supply the entire country with gas for around 10-15 years if consumed at once or if its rationed appropriately at 10-30% of annual consumption for a longer period. This would enable us to balance out a gas market crisis like recently, where we could raise the output instead of importing very expensive gas from abroad.

It will help with the current account deficit, but dont expect any magic and the imports to disappear altogether. The government needs to be smart about this money.

If they invest the profits wisely in renewables, hydrogen etc, we could use the gas to lower our energy imports for good. If they use it for election economics and nepotism. We won't be any better than all the other developing countries rich in energy, but no gain for the average citizen.

 

[Zafer]

Serious question: How economically/technically viable is it to get that gas?

Looking at how the gas is being tapped into at lightning speed it is obvious that it is profitable in the short to medium term when the gas prices are to remain high. Also considering all the infrastructure needed to import foreign gas the infrastructure being built should be cheaper as the gas user is close by. It could only be dubious if the amount of gas were too small to justify the money spent upfront. But also considering strategic importance of not depending on foreign resources it is invaluable and a nobrainer to tap into.

Turkiye has wide exploration capabilities now and more and more gas can be found to feed the infrastructure built and the efforts can be more profitable as time goes.

 

[YeşilVatan]

Looking at how the gas is being tapped into at lightning speed it is obvious that it is profitable in the short to medium term when the gas prices are to remain high. Also considering all the infrastructure needed to import foreign gas the infrastructure being built should be cheaper as the gas user is close by. It could only be dubious if the amount of gas were too small to justify the money spent upfront. But also considering strategic importance of not depending on foreign resources it is invaluable and a nobrainer to tap into.

Turkiye has wide exploration capabilities now and more and more gas can be found to feed the infrastructure built and the efforts can be more profitable as time goes.

I agree that it needs to be done just for the import substitution grounds, but I was just wondering how profitable it was.

 

[Zafer]

I agree that it needs to be done just for the import substitution grounds, but I was just wondering how profitable it was.

It is very complicated to make a guess, I will pass.

 

[Aloster]

I agree that it needs to be done just for the import substitution grounds, but I was just wondering how profitable it was.

Actually your question so complex. My answer honestly it is incredibly bargain. I try to explain ,with the aid of these reserves at longterm agreement with other countries you can get cheaper gas for per sm3. At crisis ( I don't even mention about war times just regular climate reasons) we can regulate pipeline cheaply. Normally like other countries at winter time we buy LNG so their prices very high. Also with the aid of these reserves we can protect our economy (still I mention normal time) . We don't need to slow down our industry . May be when the gas prices low we don't use full capacity. To enlength our production capacity. These reserves like MMU their priority protect our nation. Not making money. Assume that USA give F35, F22 10mil USD for each . Do you give up your defence project about MMU. It is like that.

 

[TheInsider]

Serious question: How economically/technically viable is it to get that gas?

The gas has superb quality and it is extremely profitable especially compared to LNG but it is still not as profitable as Russian or Azerbaijani gas. Russian gas is dirt cheap for their own use but the Russians sell it at a good premium.