Turkey will sign an agreement with oil giant Shell for exploration of natural gas in the Eastern Mediterranean, Turkish Energy Minister Taner Yıldız said on Wednesday.
Yıldız said the deal with Shell would pave the way for exploration of oil and natural gas both in Turkish territory and off Turkey's coasts. He said talks with Shell will begin next week.
The planned deal with Shell comes as US company Noble Energy, licensed by the Greek Cypriot administration, drills for natural gas off the island's southern coast. Turkey has protested the exploration, saying Turkish Cypriots, who run their own state in the north of the island, also should have a say in deciding what to do with Cyprus' gas and oil reserves. Turkey has also sent an exploration ship to the Eastern Mediterranean and, raising possibilities of a naval confrontation, said its exploration vessels will be escorted by warships.
Turkey's state oil company Turkish Petroleum Corporation (TPAO) and Shell have already agreed in principle to a deal and the agreement is expected to be signed by the end of this month, a news report in Sabah daily said on Wednesday. According to the report, Turkey will license Shell to dig for oil and gas in Turkey's exclusive economic zone in the Eastern Mediterranean, off the coast of the southern province of Antalya.
If the agreement is finalized as planned, Shell will undertake to finance the drill, which is expected to be at least $300 million. It will bring a massive oil exploration platform to the Mediterranean and will share revenues from hydrocarbon finds with Turkey. According to Sabah, TPAO has ascertained that there are potential oil and gas reserves in three areas in the Eastern Mediterranean. There was no information on the estimated market value of the estimated reserves.
Authorities say there is serious potential, particularly in Mersin Gulf, in the Mediterranean and estimate a drill of 5-6,000-meters in depth in this area is likely to find significant hydrocarbon reserves.