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As Turkey and Shell move forward with Black Sea oil and gas exploration - what's next?

The Black Sea's emergence as an oil and gas goldmine is set to continue after Shell Upstream Turkey and Turkish Petroleum announced that they are to carry out oil and gas explorations in the western Black Sea next year.

The exploration is scheduled to begin in the first quarter of 2015 and will continue for around eight months, with the two companies set to spend around €237 million on the project.

In order to carry out the exploration, three platform-supported drilling vessels will be required, with a land supply base being built at the Haydarpasa Port in Istanbul.

The project is the latest indication that the region is becoming something of a hotspot for oil and gas exploration, and will continue Turkey's emergence as a major player in the industry, as well as having a positive effect on the economy.

In total, around 285 workers will be employed to carry out the work required, 80 per cent of whom will be hired from outside Turkey, though many locals will also be needed to assist with operations.
 

Several projects

At the same time, oil and gas company NV Turkse Perenco is set to conduct its own oil exploration in Turkey’s eastern Diyarbakir province, in the Lice district.

The company will use four bespoke vibro drilling machines to send vibrations to the earth's crust and retrieve data that will then be used to draw a sub-surface ground map, after which NV Turkse Perenco will continue the project if all goes smoothly.

US energy company DMLP is also set to conduct oil exploration in Diyarbakir’s Bismil district and - after receiving its production licence - will work on six different drilling points.

In total, 41 employees will be required to spend eight months on the project, with 30 days spent on location, 100 days for drilling activities, 30 extra days for completing the drilling. and 90 days for oil production.

The three projects are further proof that Turkey is keen to utilise its potential assets, with the country hoping that the upcoming explorations will be just the tip of the iceberg.
 

Further interest

However, Turkey is not the only country keen to expand its Black Sea operations, with Russian oil and gas company Lukoil significantly increasing its exploration and production expenditure off the coast of Romania.

The company boosted its investment to EUR 76 million in the first nine months of 2014 from EUR 3.2 million in the same period last year, after the Romanian Government approved two concession agreements for the exploration, development and exploitation of 1,000 sq km in Romania’s Black Sea.

A report from Lukoil on its activities stated: "Internationally, we increased the expenditures for the Shah-Deniz project in Azerbaijan and started our exploration activities in our new projects in Romania and Ghana."

For countries currently reliant on imports, exploring new areas represents significant opportunity, and the Black Sea is viewed as the continent's next major hotspot for oil and gas.

Mariana Gheorghe, Chief Executive Officer at OMV Petrom, summarised the situation when saying the Black Sea is "potential for Europe".

"The hope is that by discovering and developing the gas in the Black Sea that countries will become independent from imports in the gas area," she explained. "But even more, if the discoveries and the quantities will be higher, those discoveries could lead also to cover some of the European needs."

With an increasing number of global firms descending on the Black Sea to launch new projects, the region looks set for a sustained oil and gas boom in the years ahead.


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