MOBILIZING STRATEGIC PARTNERSHIPS ACROSS THE REGION
BBSPA ANNUAL CONFERENCE, VIENNA, 26.04.2021
ADITYA SARASWAT, SENIOR ANALYST Rystad Energy
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Renewables & Supply Oil & Gas Commodity Energy Chain Power Markets Transition Agenda
• Recent upstream developments and ongoing geopolitical conflicts • A case for the regional cooperation Agenda
• Recent upstream developments and ongoing geopolitical conflicts • A case for the regional cooperation Developments in the Black sea Sakarya : “Next big thing”?
Deepwater well locations in the Turkish Black sea
Domino Intra - Europe Tuna-1
3
5 3921 2 4 6 1
Source : Rystad Energy Research & Analysis, UCube Developments in the Black sea Tuna gas discovery could unlock energy cost savings
Turkey average cost of natural gas by source, 2020 $/MMBtu
9
8
7 6.5 6 Intra - Europe
5 4.7 4 4.0
3
2
1
0 Domestic gas LNG Imports Pipeline Imports
Source : Rystad Energy Research & Analysis, GasMarketCube, UCube Developments in the Black sea Successful appraisal and development crucial for energy cost savings
Turkey natural gas imports Billion cubic meters 80
60 8 14.5
40
48 50 44 20 44
0 2017 2018 2019 2020 2021 2022 2023 Demand Sakarya Growth - 2030 Potential
Source : Rystad Energy Research & Analysis, UCube Developments in the East Mediterranean sea Turkish exploration campaign in the East Mediterranean is yet to see sizable discoveries
Exploration wells drilled in the East Mediterranean of Turkey
Exploration wells in East Mediterranean split Sl. No Well Name Region drilled Year drilled Well contents by wellbore depth (meters) 1 Seyhan-1 Gulf of Mersin 1966 Dry 2 Cinar-1 Gulf of Alexandretta 1970 Dry 17% Wellbore depth in meters 3 Karatas-1 Gulf of Mersin 1970 Dry 22% 1000-2000 4 Payas-1 Gulf of Alexandretta 1970 Dry 2001-3000 5 Ayse-1 Gulf of Alexandretta 1981 Dry 17% 6 Efe-1 Gulf of Alexandretta 1981 Shows Oil 13% 3001-4000 7 Birten-1 Gulf of Alexandretta 1984 Dry* 4001-5000 8 Gulchihan-1 Gulf of Alexandretta 1986 Oil 9% 22% >5000 9 Iskenderun-2 Gulf of Alexandretta 1987 Dry Unknown 10 Ceylan Deniz-1 Gulf of Alexandretta 2001 Dry 11 Kilic-1 Gulf of Alexandretta 2001 Dry 12 Mercan Deniz-1 Gulf of Alexandretta 2001 Dry Exploration wells in East Mediterranean split 13 Gulchihan-2 Gulf of Alexandretta 2014 Dry* by water depth (meters) 14 Yilankale-1 Gulf of Alexandretta 2014 Dry* 15 Alanya-1 Gulf of Anatalya 2018 Dry 13% 13% 16 Kuzey Erdemli-1 Gulf of Mersin 2018 Dry Water Depth in meters 17 Guzelyurt-1 Extended Turkish claims 2019 Dry 25-75 17% 18 Karpaz-1 TRNC areas 2019 Dry 150-300 19 Kuzupinari-1 Gulf of Alexandretta 2019 -- 600-800 20 Magosa-1 TRNC areas 2019 Dry 50% 9% 1500-2250 21 Finike-1 Extended Turkish claims 2020 Dry 22 Narlikuyu-1 Gulf of Mersin 2020 Dry 2250-3100 23 Nicosia-1 (Lefkosa) TRNC areas 2020 Dry 24 Seljuk-1 (Selcuklu) Extended Turkish claims 2020 Shows Hydrocarbon Wells Wells Wells Wells Note:This is not the exhaustive list *Wellbore contents estimated drilled Pre- drilled drilled drilled Source: Rystad Energy Ecube, research and analysis 2000 2000-2010 2011-2015 2018-2020 Developments in the East Mediterranean sea Turkish waters closing in on the East Mediterranean gas expedition
International borders and new maritime claims by Turkey
1 Not awarded (Disputed) 2 Eni*, Total, Kogas (Disputed) 3 Eni*, Total, Kogas (Disputed) 4 Not awarded (Disputed) 5 Not awarded (Disputed) Karpaz-1 6 Eni*, Total (Disputed) Magosa-1 7 Total*, Eni (Disputed) 8 Eni*, Total (Disputed) 9 Eni*, Total, Kogas (Disputed) Finike -1 10 ExxonMobil*, QatarPetroleum 11 Total*, Eni Intra12 Noble - Europe Energy*, Delek, Shell 3 13 Not awarded (Disputed) 1 2 Guzelyurt-1 13 Lefkosa-1 4 9 5 6 7 8
10 11 12
Yishai
EMG Pipeline TPAO wells
Source : Rystad Energy Research & Analysis, UCube Developments in the East Mediterranean sea Increased geological prospectivity brews increased geopolitical risks
Map of East Mediterranean region discoveries by resources and hydrocarbon split
Intra - Europe
Source : Rystad Energy Research & Analysis, UCube Developments in the East Mediterranean sea East Mediterranean stands out among its peers
Peer comparison (2015-19) : Discovered resources | Discovery cost Billion barrels of oil equivalent Discovery cost ($/boe) 10 7 Discovered Resources Discovery Cost 9 9 5.9 6 8
6.9 7 4.7 5 Intra - Europe 6 4 3.4 4.7 5 3.1 3 4 3.2 3 2 1.5 2 1.7 0.9 1 1 0.4 0 0 West Africa East Mediterranean Gulf of Mexico South East Asia Norway East Africa
Source : Rystad Energy Research & Analysis, UCube Agenda
• Recent upstream developments and ongoing geopolitical conflicts • A case for the regional cooperation Egyptian Gas Balances Egypt – Well slotted to be the regional export hub
Egyptian gas supply-demand balance Billion cubic meters 80
70 Gas Demand
60
Zohr Intra - Europe 50
Nooros 40 WND
30 Historical Production Others
20
10
0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source : Rystad Energy Research & Analysis, UCube, GasMarketCube Egyptian Gas Balances Route 1: Regional cooperation to export gas to Egypt*
Egyptian gas supply-demand balance Billion cubic meters 80
Upside* 70 Gas Demand Aphrodite
60 Tamar / Leviathan
Zohr 50
Nooros 40 WND
30 Historical Production Others
20
10
0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
*Scenario based – Taking risked approach and estimating at least 10 bcm from future gas discoveries in Egypt. The country holds great upside and holds potential of maintaining export potential by 2030. Source: Rystad Energy research & analysis, UCube, GasMarketCube Egyptian Gas Balances Route 2: Enough resources at hand to warrant for East Med expansion
East Med pipeline: Israeli and Cypriot gas development candidates Billion cubic meters
35
Israel (Others) Israel (Leviathan/Tamar remaining)* Cyprus (Calypso) Cyprus (Glaucus) Future Egypt imports** Demand increment (2028-35)*** East Med Phase 1 East Med Phase 2 (expansion) 30
25 East Med expansion opportunity
20
15
10
5
0 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
*Scenario based – Taking risked approach and estimating at least 10 bcm from future gas discoveries in Egypt. The country holds great upside and holds potential of maintaining export potential by 2030. Source: Rystad Energy research & analysis, UCube, GasMarketCube East Med Pipeline East Med gas benchmarks well on the scale of commerciality
Breakeven price (BE) of Israel and Cyprus supply v/s TTF gas price forecast USD/kcf
10 9.1 Cyprus TTF gas price outlook 9 Israel
8 7.5 7.2 6.9 7 6.6 Intra - Europe 5.8 6 BE calculated under different tariffs
5 4.9 4.5 4.3 Cyprus gas supply (BE) 4 3.5
3 2.7 2.5 2.4 Israeli gas supply (BE) 2 1.4
1
0 Base case* $1.25/kcf $1.5/kcf $1.75/kcf 2025 2026 2027 2028 2029 2030
*Excluding transport tariff for East med pipeline Source: Rystad Energy research & analysis, UCube, GasMarketCube Developments in the East Mediterranean sea Regional cooperation is crucial
Regional gas supply-demand balance Billion cubic meters 120 Israel - Demand Cyprus - Demand Egypt - Demand 100 Regional Supply
80
60
40
20
0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Source : Rystad Energy Research & Analysis, UCube, GasMarketCube Rystad Energy Contacts
Aditya Saraswat Efe Bulduk Senior Analyst, Upstream Research E.Europe & Mediterranean Manager Phone: +47 944 30 121 +90 5384548784 Email: [email protected] [email protected] Rystad Energy is an independent energy consulting services and business intelligence data firm offering global databases, strategy advisory and research products for energy companies and suppliers, investors, investment banks, organizations, and governments. Rystad Energy’s headquarters are located in Oslo, Norway.
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