1. Turkey:
An Oil & Gas Inflection Point
FINAL PROJECT - BRIEFING
STEPHANIE MORRISON
FEBRUARY 23, 2016
INTL – 580 INTELLIGENCE COMMUNICATIONS

2. Executive Summary:
It is likely Turkey’s oil and gas sectors will improve over the
next 12 to 24 months due to:
 Turkey’s role as an energy transit hub, connecting energy-rich
countries with high-demand Europe
 Economic growth is driving increased energy demand
 Continued investment and development of pipeline infrastructure
and storage capacity
 Expansion of relationships with suppliers and partners
 Dependence on oil and gas imports due to low domestic supply

3. Key Findings
 Energy providing Eastern European and Middle Eastern
countries depend on Turkey for access to high-demand
Western European consumer markets.
 Fastest growing emerging energy market in Europe.
Consumption rates rising, unable to keep up with demand
 Infrastructure development of major pipelines underway
 Expansion of key strategic relationships/partners – EU, Iraqi-
Kurds, Azerbaijan, Israel, Qatar
 Geo-political conflicts exist with Syrian crisis, ISIS and tension
with Russia
 Domestic Oil and Gas reserves are limited – making Turkey
energy dependent and a major energy importer.
96%
98%
Imports
Turkish Energy Imports
oil gas

4. Turkey’s Role as an
Energy Transit Hub
 Turkey has an advantageous
geo-strategic position in the region
 Seen as a key player in energy dynamics
 Turkey crucial link between EU,
Middle Eastern and Russian oil and gas assets
 Pipeline routes are becoming important network for regional
power and influence
 Reliable economic and political partner

5. Emerging Economy
 Fastest growing economies in Europe
GDP - 3.8% expected in 2016 -2017
 Currently 17th largest economy in world
 Projected to become #12 by 2023
 Energy consumption rising – with average
yearly demand at 5.7%
 Energy environment conducive to direct
foreign investment

6. Infrastructure: Pipeline Development
 Southern Gas Corridor is a planned long-term comprehensive
3-phased pipeline project to deliver natural gas to Turkey,
European consumers and other markets.
 Involves 7 countries and 11 companies
 Estimated project cost – USD $6-7 billion
 Trans-Anatolian (TANAP): Extends across Turkey from Azerbaijan. Construction
started in 2015; completion targeted for 2018.
 Trans-Adriatic (TAP): Connector line from Greece to Italy via Europe
 KRG: New natural gas pipeline (Sirnak) from northern Iraq that parallels oil line to
Kirkuk-Ceyhan in Turkey

7. Regional Relationships
It’s centralized position exposes Turkey to dynamic
geo-political relationships:
 Russia: Over-dependence on Russian oil and gas
drives Turkey to seek other relationships. Recent
military events are straining diplomacy
 Israel: Re-establishing diplomatic ties after five
year absence
 Iraqi-Kurds: mutual dependence is encouraging
strong collaboration
 European Market (EU): demand for natural gas
and oil transited through Turkey encourages
bilateral cooperation

8. Oil
 Only two major importing crude and
condensate oil pipelines in operation
 Kirkuk-Ceyhan
 Baku-Tbilsi-Ceyhan
 Oil imports projected to double in
next 10 years
 Import dependent – over 90% comes
from other countries; mainly Iraq
(27%) Iran (26%) and Russia
 Iraqi-Kurds are supplying oil
independently via the KRG line

9. Gas
 Main source of energy-surpassing oil
in 2012
 Imports 98% of its natural gas supply
from Russia, Azerbaijan, Algeria,
Iran and Nigeria
 2nd largest consumer of Russian
gas; imports over 60%
 Depends on imported gas to generate electricity – 50%
 New gas pipeline from Iraqi-Kurds (Sirnak) on-line in 2018

10. Analytic Confidence
 High
 Corroborated and reliable sources
 Low analyst subject expertise
 Moderate subject complexity
 Minimal timeframe for completion
 Worked alone without supervision
 No peer evaluation or input

11. Analyst Contact Information
 Stephanie Morrison
 Email: smorri82@lakers.mercyhurst.edu

12. References
Retrieved from: http://i.tmgrup.com.tr/dailysabah/2014/04/19/HaberDetay/1397897218766.jpg (high)
Retrieved from: http://blogs.ft.com/beyond-brics/files/2012/07/Turkeys-Petroleum-and-Pipeline-Corporation.jpg (high)
Retrieved from: http://kurdistantribune.com/wp-content/uploads/2013/11/Erdogan-and-Brazani.jpg (high)
Retrieved from: http://www.pwc.com/world2050 (high)
Retrieved from: http://tinyurl.com/z5zz5ky (high)
Retrieved from: http://tinyurl.com/hmwnq2r (high)