Canadian energy firm to develop major oil field in Turkey’s Kurdish southeast

Trillion Energy, an oil and gas producer based in Calgary, Canada, announced this week that it had entered a “farm-in agreement” with a Turkish company. Trillion made the deal for a 50% working and revenue interest in three oil exploration blocks located in the mountainous Cudi Gabar region of the Kurdish-majority southeast of Turkey, where a conflict between Turkish security forces and the outlawed Kurdistan Workers Party (PKK) has raged for decades. A farm-in agreement typically involves a partial sell-down in ownership of a project in exchange for exploration funding.

Trillion said Cudi Gabar was “central to an active petroleum system extending up from Iraq and Syria where [Turkey’s] portion contains several major oil fields including Sehit Esma Cevik, discovered in 2022 and Sehit Aybuke Yalcin, discovered in 2023."

The discovery in May of some 1 billion barrels of oil in the latter field in Sirnak province that borders energy-rich Iraq was trumpeted by the government of President Recep Tayyip Erdogan as the largest-ever onshore oil find that could potentially transform Turkey’s neglected Kurdish-majority region into an economic powerhouse.

Coming days before landmark parliamentary and presidential elections that were mistakenly judged by pollsters to favor the opposition, the announcement raised eyebrows, with critics calling it an electioneering ploy aimed at drawing votes.

Speaking at a rally in the central Anatolian city of Konya, Erdogan boasted, “We have started producing oil from wells that were sealed with cement and abandoned because of terrorism.” The 39-year old conflict has largely subsided inside Turkey and shifted to northern Iraq, where the bulk of PKK forces are currently based.

Erdogan put the total value of reserves in Cudi Gabar at $12 billion and vowed to make Turkey energy independent and a net exporter of oil in the coming years.

State-run Turkish Petroleum (TPAO) said the Sehit Aybuke Yalcin field, named after a 22-year-old schoolteacher who was killed in the crossfire of a PKK attack in 2017, currently produces 10,000 barrels of oil per day. The production target is set for 10 times that amount, more than doubling Turkey’s current oil production.

TPAO said the fields contain “light” crude that is easy to extract and refine. Sirnak Governor Osman Bilgin said the oil was so light that it could be used as is to operate diesel-powered tractors.

Industry sources, however, air skepticism. Mehmet Ogutucu, an internationally acclaimed Turkish energy expert with long years of experience in Iraqi Kurdistan, told Al-Monitor, “The claims about Cudi Gabar are somewhat dubious because they have not been independently verified. The presence of oil in the area was a long known fact but it was not economical to produce, and I am not sure that this has changed.”

Ogutucu went on, “The cost of production is likely to be very high and it's impossible for Trillion to do this on its own. A rich investor is required if the reserves are as big as is claimed.” Another Turkish oil and gas veteran who has worked on the Atrush oil field right across the border in Iraqi Kurdistan said that contrary to TPAO’s claims, the oil was likely to be below the commercially lucrative 41 API gravity grade.

Oilfield Technology, an industry publication, noted Monday, “No economic discoveries have yet been made pursuant to the farm-in by Trillion and there is no guarantee that any oil discovery will be made.”

As of this year, Turkey’s economy was ranked as the 19th largest in the world as measured by nominal GDP. However, it has little oil and gas, importing nearly all of its energy needs. Turkey’s top suppliers are Russia, Azerbaijan and Iran. Other recent discoveries include 710 billion cubic meters of recoverable natural gas in the Black Sea. Initial production of 10 million cubic meters of gas per day is slated for September and that figure is expected to rise to 40 million cubic meters once full capacity is achieved. Trillion Energy is part of a group of energy companies developing the field with TPAO.