Alex Kimani

Alex Kimani is a veteran finance author, investor, engineer and researcher for Safehaven.com. 

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• Turkey is pursuing oil and gasoline exploration in Bulgaria, Iraq, and Libya
• Ankara goals to spice up home manufacturing and change into a key vitality hub linking East and West.
• Turkey’s vitality technique contains affect in post-conflict Libya and potential pipeline hyperlinks by way of Syria.

Turkey is at the moment in talks to probe for oil and gasoline in Bulgaria, with comparable plans for exploration in Iraq and Libya, Turkish Vitality Minister Alparslan Bayraktar has revealed. Based on the minister, state-owned vitality firm Turkiye Petrolleri AO (TPAO) will signal an settlement with an unnamed international companion inside the subsequent month to conduct exploration in Bulgaria’s part of the Black Sea. 

Turkey not solely needs to spice up home oil and gasoline manufacturing, but in addition harbors ambitions to change into a regional vitality hub. Turkish President Recep Tayyip Erdo?an has been attempting to place Turkey as an vitality hub, connecting pure gasoline producers to its east and south with markets to the west. The nation’s strategic geographical place and infrastructure give it a bonus on this regard.

Turkey and Bulgaria signed a deal in 2023 to allow Bulgaria’s state-owned Bulgargaz to import 1.85 billion cubic meters of gasoline per year– good for ~60% of Bulgaria’s annual demand–through the Strandzha-Malkoclar interconnection border level with Turkey. Bulgargaz has to pay a €2 billion service charge to Turkish gasoline agency Bota? over a 13-year interval, no matter whether or not it makes use of this capability. Based on Bayraktar, the capability to export by way of Bulgaria proper now’s solely round 3.5 billion cubic meters a yr however capabilities may be boosted. 

“What we want is a rise within the capability of the interconnection between Turkey and Bulgaria”, which at the moment can solely obtain about half of the quantity of seven billion cubic meters per yr that, from a technical viewpoint, Turkey can present it,” Bayraktar informed Bloomberg.

However Libya might be Erdogan’s largest gamble, that’s simply as a lot about energy and affect as it’s about vitality.

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After greater than a decade of instability, Libya is increasing oil manufacturing, regardless of excessive political fragility that has analysts more and more anxious a couple of return to civil conflict.

Based on Chairman of Libya’s Nationwide Oil Company Masoud Sulaiman, Libya plans to extend oil output from 1.4 mb/d at the moment to 2 mb/d in 2028. Nevertheless, ramping output to that degree would require appreciable capital outlays: Abdulsadek estimates that Libya wants between $3 billion and $4 billion to achieve its intermediate aim of oil manufacturing fee of 1.6 mb/d, including {that a} new license bidding spherical is predicted to be permitted by the cupboard. The Libyan financial system depends closely on oil, with fossil fuels accounting for greater than 95% of its financial output.

Final yr, Turkey introduced that it was ready to considerably improve pure gasoline exports to the European Union, determined to additional wean itself off Russian gasoline. With the intention to do this, the almost certainly route is to re-export Azeri pure gasoline from Turkey. That, in flip, would require Turkey to absorb extra Russian gasoline to make up for the shortfall. Ankara is eager to play the function of savior and enhance its leverage with respect to Brussels, but it surely needs some demand ensures earlier than it begins spending on the required infrastructure. The Trans-Anatolian Pure Fuel Pipeline, which kinds a part of the Southern Fuel Hall bringing Azerbaijani gasoline to Europe, is a strategic benefit for Turkey. The nation can be residence to 5 LNG terminals, seven gasoline pipelines, three floating storage items, and two underground storage amenities, in addition to appreciable extra import capability that could possibly be used for buying and selling.

Alternatively, over the previous couple of years, Europe has been attempting to safe different gasoline provides to switch Russian gasoline transiting by way of Ukraine. Russian gasoline stopped flowing to EU states by way of Ukraine after a five-year deal expired on January 1 2025, marking the tip of a decades-long association. Ukrainian President Volodymyr Zelensky declared that his nation wouldn’t permit Russia to “earn extra billions on our blood”, with a cross-section of leaders describing it as but”one other victory” towards Moscow.

Russia can nonetheless ship gasoline to Hungary, Turkey and Serbia by way of the TurkStream pipeline throughout the Black Sea. Azerbaijan’s pure gasoline offered to Turkey could possibly be re-exported to Europe, presumably by way of Bulgaria, however not with out effort and expense. In an interview with Bloomberg,  Bayraktar pushed laborious for a Bulgaria route, noting a possible for rising volumes to the EU as much as 10 billion cubic meters per yr, whereas sending a transparent message to Brussels: It gained’t occur with out some demand ensures.

Turkey’s ambitions to change into a number one vitality hub in Europe additionally gathered momentum after the sudden collapse of the 54-year Assad dynasty in Syria. Turkish firms are well-placed to safe main contracts ought to Syria remodel right into a free market, with the value of reconstruction estimated at $400 billion. Turkey may assemble a gasoline pipeline to the west of Syria and connect with the Arab Fuel Pipeline community (which hyperlinks Syria, Jordan, and Egypt). This might assist Turkey to supply regional gasoline producers akin to Israel and Egypt a extra commercially viable path to European markets in comparison with present LNG alternate options. 

By Alex Kimani for Oilprice.com

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