Massive gas finds will pave way to TPAO, Botaş IPOs: Minister

ISTANBUL

Turkey’s largest natural gas finds in the waters of the Black Sea will soon prompt the initial public offerings (IPOs) of its national petroleum and pipeline companies, Treasury and Finance Minister Berat Albayrak has said.

With the discovery of 320 billion cubic meters (bcm) of natural gas found some 175 kilometers off the coast of Turkey’s Zonguldak province, the Turkish Petroleum Corporation (TPAO) and Petroleum Pipeline Corporation (Botaş) will advance to an upper league, he told private broadcaster NTV during a live interview aired late on Aug. 25.

“In the near term, the development of these finds will pave the way for IPOs of both TPAO and Botaş, maybe first domestically and then overseas,” he said.

“Their balance sheets rising to levels on par with the world’s most valuable energy companies will lead to IPOs. We will prepare the legal infrastructure,” he added.

TPAO’s large portfolio of exploration and drilling licenses and Botaş’s extensive transmission and distribution network will attract both local and foreign investors when they become listed companies, Albayrak said.

The state-owned energy companies have the potential to pass the market value of the national flag carrier, Turkish Airlines ($2.1 billion), which is listed on Borsa Istanbul.

The gas discovery was made at a depth of 2,100 meters below the seabed in the Sakarya Gas Field, according to an announcement by Turkish President Recep Tayyip Erdoğan on Aug. 21.

The government has put an ambitious target to take the gas into the national grid in 2023.

Turkey will decrease its gas import bill, which was around $12 billion last year, significantly when the gas flow from the Sakarya field starts.

Ankara is also expected to have the upper hand in the renegotiation of long-term pipeline gas deals with Russia, Iran and Azerbaijan.

More than two-thirds of Turkey’s natural gas imports last year (nearly 33 bcm) were delivered via pipelines, whereas 28 percent of the imports consisted of liquefied natural gas (LNG) shipments mostly from Qatar, the United States, Algeria and Nigeria.

Albayrak also said that the new discovery could lead to a new cooperation with Russia and Iran, particularly in ensuring Europe’s energy security.

“Russia has always been a reliable supplier, even in our toughest times,” he said.

Turkish consumers could benefit from cheaper industrial and household gas and electricity prices even before 2023, he added.

TPAO set to plan extraction

The natural gas finds in the Black Sea is likely to be followed by further discoveries, according to Turkish authorities.

“The work will continue for exploration as well as drilling at the same time. We are very hopeful that it will lead to other fields in the same area,” presidential spokesperson İbrahim Kalın told television network Bloomberg.

“Turkey will be an energy-producing country. That is a new dimension, a very significant one,” he said.

The extraction of the Black Sea natural gas will be solely managed by TPAO Energy and Natural Resources, the minister said on Aug. 25.

“We own the operation in these areas, and we have no partners. Now that we have found it, we will know how to extract it. It will be owned and operated by TPAO,” he said.

“We have been gaining experience in deep-water exploration. We have recruited foreign experts,” he added.