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Turkish Shale Gas Reserve Estimates Groundless

The euphoria of the prospects of trillions of cubic meters of Turkish shale gas has kept the country's agenda busy over the recent years, as these estimates indicate that Turkey, which is almost completely dependent on foreign countries for fuel...

The euphoria of the prospects of trillions of cubic meters of Turkish shale gas has kept the country's agenda busy over the recent years, as these estimates indicate that Turkey, which is almost completely dependent on foreign countries for fuel resources, will finally rid itself of the major constituent of its current account deficit (CAD) and enjoy competitive energy prices.

The US government released an analysis in early 2011 on Turkey's reserves, estimating that the nation has 424.8 trillion cubic meters of technically recoverable shale gas. Some experts claim 2 trillion cubic meters of gas reserves in Turkey, while a few others hazard a guess of 1.2 trillion, all adopted in different media outlets with the same excitement. Despite these speculative numbers, ExxonMobil and Shell, along with a number of relatively small companies, have so far declared interest in helping the Turkish Petroleum Corporation (TPAO) tap the resource.

"We are watching all these stories about the quantity of shale gas in the media in total disbelief," says Selami Incedalci, the general director of Petroleum Affairs. Speaking to Today's Zaman, Incedalci noted that shale gas drilling economically makes sense only if the value of total organic carbon (TOC) is over 10 percent. If the hydrocarbons contained in shale layers are rich in TOC, it is possible to produce both natural gas and oil, he says, adding that the sources in Turkey were proven to be suitable for both types. However, Incedalci also noted that the key geological parameters of these sources are not determined clearly and need to be analyzed thoroughly, along with detailed inspections concerning some additional physical features of the layer structures, including the porosity, permeability, electrical properties and fraction systems.

Not a single parameter well has ever been opened in Turkey until recently. For the first time, TPAO drilled the Saribugday well in Diyarbakir's Silvan district for this purpose and has dug 3,000 meters down so far.

"Will a single well be sufficient to map out all the necessary parameters of the shale formation? We don't know yet. Is its location where it should be? We don't know," said Incedalci. "Maybe we will need to dig more wells depending on the results of the studies, and only after this can we proceed with some calculations on how much shale gas the layer contains in its reservoir."

There are a lot more procedures required to figure out a close approximation of the reserves, like delineating dispersion patterns through analyses on certain depths of hundreds of selected well, gauging the layers with rich TOC values, etc.

Asked about how there could be a myriad of imbalanced estimations about the shale gas reserves in Turkey, he says these are volumetric guesstimates and have a degree of reliability of 25 percent at best. He says these are like trying to find out when an earthquake will happen by using seismic waves alone.

Alex Jackson, a political risk analyst for Menas Associates, pointed to the fact that the shale gas estimates are always very controversial. The field is still in its infancy, even in countries with large shale industries like the US, so it is impossible to get a really accurate understanding of shale reserves, said Jackson. "I cannot really be certain whether or not Turkey is indeed rich in shale. However, the very fact that companies like Exxon and Shell are investing in shale exploration in Turkey is significant in itself and so their presence should be taken as a vote of confidence in Turkey's shale potential."

TPAO is working on the parameters in the Silvan well with Shell. The findings of the study will not be disclosed as a "commercial secret," but if they are lucrative enough, Shell will start drilling wells for further scoping of the shale gas formations. Afterwards, the first test production will take place and according to the results of this provisional production, the company will dig a hole for permanent production. Incedalci notes that the first gas extraction trials may kick off in late 2013 in Silvan if the outcome of the studies of the parameters of the well is feasible enough.

Stressing the involvement of energy giants like Exxon and Shell, Jackson is certain that the economics of shale gas can make sense, although the main point seems to be political. "Turkey is keen to reduce its reliance on imported gas sources, so pursuing domestic shale, regardless of the price, will be popular in the government," he said.

Shale gas prospects are feeding the hopes of an energy-independent Turkey, along with its implications that the prices will fall to as low as one-third of the current levels: good news for households, industry and the nation as a whole. But it seems that there is still a long distance to go even to learn how much gas is lying kilometers below the earth.