* Several firms eye exploration licences, official say
* Southeastern region around Diyarbakir main prospect
* Major reserves could reduce reliance on imported energy
By Orhan Coskun and Evrim Ergin
ANKARA/ISTANBUL, Feb 18 Turkey is hoping to find
shale gas reserves big enough to help reduce its energy import
dependency and is in talks with foreign firms about widening
exploration after encouraging early signs, industry officials
said on Monday.
The government is hoping that major shale gas reserves lie
in basins in its southeast, east and western Thrace regions and
officials say several firms, including smaller players already
looking for conventional oil and gas, are keen to explore.
With domestic gas consumption rising and its geographic
location meaning it is also well-placed to supply international
markets, major exploitable reserves could be a game changer for
Turkey's economy and highly lucrative for whoever finds them.
"We are keen to exploit this method and we must make
economic use of shale gas," Energy Minister Taner Yildiz told
Reuters, saying it would be a priority for the near future.
Shell is drilling for shale gas in the region
around the southeastern city of Diyarbakir, while Canadian firm
TransAtlantic Petroleum is also active in the region.
"Companies from the UK, U.S. and Canada are keen on shale
gas production in Turkey," said one senior energy ministry
official, declining to be named because talks with potential
partners were ongoing.
"These firms are in close contact with Turkish companies to
obtain licences and to collaborate with them. They are also
talking to state firms and are drawing up projections on
possible sites and what can be done in the near future."
At least one foreign company was expected to sign an
agreement for shale gas exploration this year, officials said.
Estimates of how big Turkey's shale gas reserves might be
One senior energy official said data from some international
bodies suggested Turkey could have a massive 20 trillion cubic
metres (cbm) of total reserves. Another industry expert said
proven reserves so far stood at just 6-7 billion cbm.
That compares to an estimated 1.2 trillion cbm (42 trillion
cubic feet), according to the U.S. Energy Information
Administration, in Ukraine, where Shell signed a landmark $10
billion shale gas deal last month.
"At present it is not possible to predict (Turkey's) shale
gas reserves," Shell's Upstream International Director Andy
Brown told Reuters in Ankara last Thursday, adding Shell would
complete its exploration in Diyarbakir by the end of the year.
"We will be able to make an assessment only after we
complete the first well, and then we'll be able to see the full
picture," he said.
Turkey is keen to cut down on an energy bill which last year
stood at $60 billion and is pursuing a strategy to develop
domestic resources including nuclear, coal, solar and wind
energy. For now, shale gas is seen as a potential boon.
"It is not only a matter of locating reserves. Establishing
how economic this gas will be is just as important," said a
senior official from state-owned energy company TPAO.
"Turkey's annual gas consumption of 47 billion cbm as well
as the amenities of shipment and proximity to international
markets will certainly make production attractive," he said.
Unconventional oil and gas resources such as shale are often
located in the same sedimentary basins as conventional oil and
gas fields, as appears to be the case in Turkey.
In many cases, the shale or tight rocks which are targeted
by horizontal drilling and hydraulic fracturing were the
original source for the oil and gas found in more conventional
Experts say the vast Dadas Shale basin in southeastern
Turkey, a region around Diyarbakir where TransAtlantic and
fellow Canadian-listed firm Valeura Energy are
drilling, is one such example.
TransAtlantic said in October it had completed its first
horizontal oil producing well in Turkey, an investment in the
sort of production technology that would be required for Turkey
to exploit its shale reserves.
Shell is expected to drill three more wells in Diyarbakir
this year as it prospects for shale gas, although officials say
if commercially viable reserves are found, any production would
be unlikely before at least 2016.
Turkey's government, struggling to diversify energy supplies
to an increasingly demanding population, is likely to want any
viable reserves exploited as quickly as possible.
"It is early days in terms of determining the size of the
shale gas (or oil) resource and shale developments, but I
understand early results are encouraging," said Yvonne Telford,
analyst for Wood Mackenzie's upstream research service.
"Turkey's existing onshore oil and gas production and
transport infrastructure provides a 'good fit' for shale gas or
oil developments," she said.
Turkish environmental groups have lobbied against greater
use of coal and nuclear energy but there has so far been little
sign of the sort of opposition to fracking, the controversial
drilling method used to extract shale gas, that has been seen in
some other countries.
France banned fracking in 2011 after concerns were raised
that fracking could pollute groundwater or trigger earthquakes.