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RR RUEHAG RUEHAST RUEHBC RUEHDA RUEHDE RUEHDF RUEHFL RUEHIHL RUEHIK
RUEHKUK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK
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DE RUEHIT #0083/01 0450819
ZNR UUUUU ZZH
R 140819Z FEB 08
FM AMCONSUL ISTANBUL
TO RUEHAK/AMEMBASSY ANKARA 7456
RUEHC/SECSTATE WASHDC 7874
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNRAQ/IRAQ COLLECTIVE
RUEHDA/AMCONSUL ADANA 2337
RUETITH/ODC ANKARA TU
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 02 ISTANBUL 000083 
 
SIPDIS 
 
SIPDIS 
 
EEB FOR A/S SULLIVAN 
EUR FOR DAS BRYZA 
EEB FOR MANN 
DOE FOR HEGBURG 
 
E.O. 12958: N/A 
TAGS: ENRG EPET TU
SUBJECT: Vast Oil and Gas Potential in the Black Sea Asserted by 
Turkey's State Oil President 
 
 
ISTANBUL 00000083  001.2 OF 002 
 
 
------------------------ 
Summary 
------------------------ 
 
¶1. (SBU) The Black Sea holds sizable oil and natural gas resources 
according to the Turkish Petroleum Corporation (TPAO) President and 
Chairman Mehmet Uysal. In a meeting on the margins of the Clean 
Energy Conference on January 29 with U.S. Department of Energy 
Deputy Assistant Secretary Alan Hegburg, Uysal stated that Turkey 
will start early production of Black Sea energy within seven years. 
Hegburg welcomed this development and cautioned Uysal that Russia 
and Iran will not be able to meet future natural gas demands. 
Developing alternative sources of natural gas sources from Egypt, 
the Persian Gulf, or Iraqi would help meet future demand, according 
to Hegburg. 
 
------------------------ 
Bright Prospects for Black Sea Energy 
------------------------ 
 
¶2.  (SBU) Uysal stated TPAO expects high interest in a bidding round 
that will close February 15 on five prospective areas in the Black 
Sea.  Uysal told Hegburg that recent seismic surveys of the Black 
Sea showed potential for 10 billion barrels of oil equivalent (boe); 
with oil expected in the eastern region and natural gas in the 
western region. Moreover, the Black Sea is a technically easier 
place to drill than the Caspian Sea since it lacks a hard layer of 
salt, according to Uysal. 
 
¶3.  (SBU) TPAO intends to aggressively exploit the Black Sea, 
according to Uysal.  Early production should begin in 2015 and full 
production would start in 2023.  This date is particularly 
significant since it coincides with the 100 year anniversary of the 
founding of Turkey, and the ceremony for the start of full 
production would be added to the Turkish centennial celebrations. 
Hegburg welcomed this news and confirmed that potential contacts for 
Black Sea resources would be developed with production sharing 
agreements (PSA), a commercial arrangement favored by foreign 
investors. 
 
--------------------------- 
More Gas Needed for Nabucco 
--------------------------- 
 
¶4.  (SBU) Hegburg cautioned that there may not be enough gas to meet 
Europe's growing demand.   Hegburg stated that Iran is an unreliable 
supplier, and Russia fails to make necessary investments into its 
gas sector.  Furthermore, gas from the promising fields in eastern 
Russia could be piped eastward towards the growing Chinese and 
Indian markets.  Uysal responded that TPAO strongly supports the 
Nabucco gas pipeline.  He also added that LNG from the Turkish port 
Ceyhan could supply gas to Europe. Note:  GOT is encouraging the 
development of an LNG terminal in Ceyhan.  Presently, there is not 
one.  End note.) Uysal also insisted that Gazprom's 900 km pipeline 
under the Black Sea--South Stream--was not a threat to Nabucco since 
the project is not technically feasible. 
 
------------------------ 
Prospects for Iraqi Energy Development 
------------------------ 
 
¶5.  (SBU) Uysal noted Turkey's interest and natural advantage in 
developing Iraq's energy resources due to its historical ties and 
existing oil operations. Uysal opined that Iraqi gas from Anbar 
Province could be piped out to the Turkish port of Ceyhan via a gas 
pipeline to be built paralleling existing oil lines or could be used 
to feed Nabucco. However, the lack of a hydrocarbon law, an unclear 
security situation, and business contracts that are unfavorable to 
investors-(i.e. modified buyback contacts)-are current barriers for 
developing Iraq's energy resources. (Note:  TPAO and BOTAS are part 
of a consortium led by Shell which has proposed a comprehensive gas 
development plan for Iraq including eventual pipeline exports to 
Europe. End note.) Hegburg stated that small steps could be taken in 
Iraq, particularly capturing the gas that is currently being flared. 
He also noted that Iraq must see value in the Turkish market before 
committing to it, and said that currently, Turkey's gas pricing 
strategy is not market competitive. 
 
 
ISTANBUL 00000083  002.2 OF 002 
 
 
¶6. DOE DAS Alan Hegburg has cleared this cable. 
 
OUDKIRK