By Charles Constantinou
Turkey (TUR) has a growing population and an expanding economy but depends practically completely on imported oil and natural gas for its energy needs, which have become extremely expensive.
In 2012 the population of Turkey was 75 million and is expected to grow to 100 million by the year 2030. Its GDP is about $800 Billion or about $10,000 per capita.
Since 2001 oil consumption has increased from about 230.7 million barrels to 250.7 million barrels in 2012 but became of an increase in the cost of imported oil from $22.81 per barrel to $109.08 per barrel during the same period, total foreign exchange paid for oil imports reached $27.35 billion in 2012.
Natural gas consumption increases have been more rapid, rising from 564.8 Billion cubic feet in 2001 to 1,634.4 Billion cubic feet in 2012 at an estimated foreign exchange cost of $16.6 billion.
Altogether, foreign exchange costs for oil, gas and coal in 2012 are estimated at $47.05 billion or about 6.0% of GDP and $627.3 per capita, which proportionately is much higher than the costs incurred by the USA.
Future economic growth will require more energy imports which can hardly be sustainable. Foreign exchange costs may be reduced if more cooperative arrangements can be made with neighboring countries in the Eastern Mediterranean where vast natural gas discoveries have already been made especially in Israel and Cyprus and according to a (statement by the CEO of Noble Energy Inc.) (NBL) these are prospects of discovering 3 billion barrels of oil in the offshore border between Cyprus and Israel. In the meantime, no exploration at all has taken place in the Aegean Sea because of fundamental disagreements on sovereignty without much effort to reach any wise diplomatic compromise through direct negotiations or international arbitration. In the meantime both Turkey and Greece pay enormous amounts for energy imports and spend additional billions of dollars for extra armaments in case of war between the two countries. The situation is similar in China and it’s conflict with all neighbors on the sovereignty around several islands, which is believed, are surrounded with potential oil and gas resources.
Greece, suffering from expensive energy imports, as much, if not more than Turkey has been unable to even carry out seismic surveys in the Aegean Sea because of Turkish military threats and has turned the limited resource of its national petroleum company to explorations in the Ionian Sea where natural gas prospects seem to exist.
Why should two neighboring countries suffering from very heavy burdens of FX for oil and gas imports not set aside the question of sovereignty and concentrate on rational compromise exploration in Aegean Sea? Write to me and let’s discuss.
A full analysis of the Energy Situation and Prospects of Turkey is available. The purpose of this short article is to invite comments and especially new ideas on how to solve this serious problem for the benefit of both Greece and Turkey and neighboring countries in the Eastern Mediterranean, including Cyprus and Israel.
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**** Charles Constantinou, Former Chief of Energy Program United Nations (UN)